True or False: The price-level effect describes a change in the interest rate due to a change in the expected inflation rate. o False O True The following graph shows the supply and demand curves in the market for loanable funds. Consider an increase in the expected inflation rate. INTEREST RATE Adjust the following graph to show the effect of this increase in the expected inflation rate. SLF2 The price-level effect The expectations effect The income effect SLF1 The liquidity effect F2 QUANTITY OF LOANABLE FUNDS PLF1 DLF Which of the following refer to changes that affect the demand for loanable funds but not the supply? Check all that apply. SLF

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