Show the effect on the real interest rate and equilibrium quantity of loanable funds of a decrease in the demand for loanable funds and a smaller decrease in the supply of loanable funds.       Draw a demand for loanable funds curve. Label it DLF0. Draw a supply of loanable funds curve. Label it SLF0. Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1.          Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF1. Draw a curve that shows a smaller decrease in the supply of loanable funds. Label it SLF1. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.

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A: The given figure indicates the market for loanable funds.

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Q: Draw a correctly labeled graph of the loanable funds market showing the equilibrium real interest…

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A: Household savings act as a source of supply of loanable funds in the loanable funds market.

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A: Market for loanable funds studies the behavior of interest rate and quantity of loanable funds with…

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A: Equilibrium refers to the quantity where Demand and supply intersect each other.

Q: The graph depicts the market for loanable funds. Shift the appropriate curves to indicate what will…

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Q: Show how an increase in the supply of loanable funds and a decrease in the demand for loanable funds…

A: The following curves are drawn below:

Q: The following graph shows the market for loanable funds in a closed economy. The upward-sloping…

A: The market for Loanable Funds defines how the borrowing and lending activities take place in the…

Q: The following graph shows the market for loanable funds in a closed economy. The upward-sloping…

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A: A high interest rate can also indicate that something positive is happening in the economy.

Public Saving

Public saving deals with the amount which has been in excess after meeting all the obligatory expenses and investment of the government. Taxes are collected by the government to meet its day-to-day expenditures. The obligatory expenses include all those expenses which are mandatory for the government. It cannot be avoided as it is inevitable.