Show how an increase in the supply of loanable funds and a decrease in the demand for loanable funds can lower the real interest rate and leave the equilibrium quantity of loanable funds unchanged. Draw a demand for loanable funds curve. Label it DLF.. Draw a supply of loanable funds curve. Label it SLF,. 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 DLF,. Draw a curve that shows an increase in the supply of loanable funds. Draw it in such a way that the equilibrium quantity of loanable funds does not change. Label it SLF,. Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Show how an increase in the supply of loanable funds and a decrease in the
demand for loanable funds can lower the real interest rate and leave the
Real interest rate (percent per year)
12-
equilibrium quantity of loanable funds unchanged.
10-
Draw a demand for loanable funds curve. Label it DLF,.
Draw a supply of loanable funds curve. Label it SLF,.
Draw a point at the equilibrium real interest rate and quantity of loanable funds.
Label it 1.
8-
6-
Draw a curve that shows a decrease in the demand for loanable funds. Label it
DLF,.
Draw a curve that shows an increase in the supply of loanable funds. Draw it in
such a way that the equilibrium quantity of loanable funds does not change. Label
it SLF,.
4-
2-
Draw a point at the new equilibrium real interest rate and quantity of loanable
funds. Label it 2.
0-
Loanable funds (trillions of 2007 dollars)
>>> Draw only the objects specified in the question.
Transcribed Image Text:Show how an increase in the supply of loanable funds and a decrease in the demand for loanable funds can lower the real interest rate and leave the Real interest rate (percent per year) 12- equilibrium quantity of loanable funds unchanged. 10- Draw a demand for loanable funds curve. Label it DLF,. Draw a supply of loanable funds curve. Label it SLF,. Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1. 8- 6- Draw a curve that shows a decrease in the demand for loanable funds. Label it DLF,. Draw a curve that shows an increase in the supply of loanable funds. Draw it in such a way that the equilibrium quantity of loanable funds does not change. Label it SLF,. 4- 2- Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2. 0- Loanable funds (trillions of 2007 dollars) >>> Draw only the objects specified in the question.
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