Ask Question
6 November, 08:30

In the loanable funds model, an increase in an investment tax credit would create a a. shortage at the former equilibrium interest rate. This shortage would lead to a rise in the interest rate. b. shortage at the former equilibrium interest rate. This shortage would lead to a fall in the interest rate. c. surplus at the former equilibrium interest rate. This surplus would lead to a rise in the interest rate. d. surplus at the former equilibrium interest rate. This surplus would lead to a fall in the interest rate.

+4
Answers (1)
  1. 6 November, 08:32
    0
    a. shortage at the former equilibrium interest rate. This shortage would lead to a rise in the interest rate.

    Explanation:

    The equilibrium in the market for loanable funds is achieved when the quantities of loans that borrowers want are the same as the quantity of savings that savers provide. The interest rate adjusts to make these equal.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In the loanable funds model, an increase in an investment tax credit would create a a. shortage at the former equilibrium interest rate. ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers