(Figure: Loanable Funds) Look at the figure Loanable Funds. Which of the following might produce a new equilibrium interest rate of 8% and a new equilibrium quantity of loanable funds of $75 billion? O Capital inflows from foreign citizens decline. The federal government runs a budget deficit rather than a surplus. O Profit expectations for business investments become less optimistic. O The government eliminates taxes on income from interest earned.

Essentials of Economics (MindTap Course List)
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ISBN:9781337091992
Author:N. Gregory Mankiw
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Chapter18: Savings,investment And The Financial System
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Figure: Loanable Funds
Interest
rate
9
S
Reference: Ref 10-7
D
$100
Quantity of loanable funds
(billions of dollars)
(Figure: Loanable Funds) Look at the figure Loanable Funds. Which of the following might
produce a new equilibrium interest rate of 8% and a new equilibrium quantity of loanable
funds of $75 billion?
O Capital inflows from foreign citizens decline.
O The federal government runs a budget deficit rather than a surplus.
O Profit expectations for business investments become less optimistic.
O The government eliminates taxes on income from interest earned.
Transcribed Image Text:Figure: Loanable Funds Interest rate 9 S Reference: Ref 10-7 D $100 Quantity of loanable funds (billions of dollars) (Figure: Loanable Funds) Look at the figure Loanable Funds. Which of the following might produce a new equilibrium interest rate of 8% and a new equilibrium quantity of loanable funds of $75 billion? O Capital inflows from foreign citizens decline. O The federal government runs a budget deficit rather than a surplus. O Profit expectations for business investments become less optimistic. O The government eliminates taxes on income from interest earned.
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