Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Qdpre-TILSA = 14 -130P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institutions was QSpre-TILSA = 6 + 70P (in billions of dollars). The TILSA now requires lenders to provide consumers with complete information about the rights and responsibilities of entering into a lending relationship with the institution, and as a result, the demand for loans increased to Qdpost-TILSA = 22 -130P (in billions of dollars). However, the TILSA also imposed “compliance costs” on lending institutions, and this reduced the supply of consumer loans to QSpost-TILSA = 2 + 70P (in billions of dollars). Based on this information, compare the equilibrium price and quantity of consumer loans before and after the Truth in Lending Simplification Act.(Note: Q is measured in billions of dollars and P is the interest rate). Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place. Equilibrium price (interest rate) before TILSA: percent Equilibrium quantity (in billions of dollars) before TILSA: $ billion Equilibrium price (interest rate) after TILSA: percent Equilibrium quantity (in billions of dollars) after TILSA: $ billion
Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the
Based on this information, compare the
Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place.
Equilibrium price (interest rate) before TILSA: percent
Equilibrium price (interest rate) after TILSA: percent
Equilibrium quantity (in billions of dollars) after TILSA: $ billion
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