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Interest Rate and Equilibrium Quantity of Loanable Funds Assignment | Homework For You

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December 10th, 2019

Show the effect on the real interest rate and equilibrium quantity of loanable funds of an increase in the demand for loanable funds and an even larger increasean even larger increase in the supply of loanable funds.

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Homework For You

Draw a demand for loanable funds curve. Label it DLF0.

Draw a supply of loanable funds curve. Label it SLF0.

Draw a point at the equilibrium real interest rate and quantity of loanable funds. Label it 1.

Draw a curve that shows an increasean increase in the demand for loanable funds. Label it DLF1.

Draw a curve that shows an even larger increasean even larger increase in the supply of loanable funds. Label it SLF1.

Draw a point at the new equilibrium real interest rate and quantity of loanable funds. Label it 2.

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