16. Business cycles and confidence The following graph shows the demand and supply of bonds in the bond market. Adjust the following graph to show the effect of a decrease in business confidence. The Bond Market Demand Supply BOND PRICE QUANTITY OF BONDS Demand Supply The following graph shows the market for loanable funds. Adjust the following graph to show the effect of a change in the bond market resulting from a decrease in business confidence. The Market for Loanable Funds Demand Supply INTEREST RATE QUANTITY OF LOANABLE FUNDS Demand Supply When confidence in the future decreases, bond prices and yields . As a result, the economy , which means that interest rates are