In the loanable funds model, a reduction in the investment tax would create an Group of answer choices excess demand of funds at the initial equilibrium interest rate. This excess demand would lead to a rise in the interest rate. excess demand of funds at the initial equilibrium interest rate. This excess demand would lead to a fall in the interest rate. excess supply of funds at the initial equilibrium interest rate. This excess supply would lead to a rise in the interest rate. excess supply of funds at the initial equilibrium interest rate. This excess supply would lead to a fall in the interest rate.
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