Draw a graph of the market for loanable funds. Show the effect on the equilibrium real interest rate and quantity of funds loaned and borrowed of each of the following events:
a. Consumers decide to spend less.
b. The government decreases its spending.
c. Businesses become pessimistic about future profitability.
d. Imports increase.
e. The government’s budget deficit increases, and at the same time, investment in new capital goods becomes more profitable.