Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:If there is a surplus of loanable funds, then
1) the quantity demanded is greater than the quantity supplied and the interest rate will rise.
2) the quantity demanded is greater than the quantity supplied and the interest rate will fal.
O 3) the quantity supplied is greater than the quantity demanded and the interest rate will rise.
4) the quantity supplied is greater than the quantity demanded and the interest rate will fall.
Transcribed Image Text:Suppose that Congress were to institute an investment tax credit. What would happen in the market for loanable funds?
• 1) The demand curve for loanable funds would shift left.
2) The supply curve of loanable funds would shift ieft.
3) The demand curve of loanable funds wouid shift right
4) The supply curve of loanable funds would shift right
Expert Solution
Step 1
When there is any excess supply of anything above the demand then it will cause surplus.
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