2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. ? D2 20 18 D1 Equilibrium 16 14 12 INTEREST RATE, (Percent) 10 8 $ 2 of 2 4 16 18 20 10 12 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed by billion. Which of the following factors could be responsible for the change in demand shown in the graph? The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money supply. Expected inflation decreased. Households began saving a greater percentage of their income. New technological advances opened up more production opportunities for businesses. 2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. ? D2 20 + 18 D1 Equilibrium 16 14 12 INTEREST RATE, r (Percent) 10 8 S 2 0 2 4 16 18 20 10 12 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed by billion. decreased Which of the following factors could be responsible for the change in demand shov bh? increased The Federal Reserve (the Fed) decided to relax its monetary policy and money supply. Expected inflation decreased. Households began saving a greater percentage of their income. New technological advances opened up more production opportunities for businesses. 2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. ? 20 D2 + 18 D1 Equilibrium 16 14 12 INTEREST RATE, I (Percent) 10 8 S 2 0 0 2 4 16 18 20 10 12 14 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed by billion. Which of the following factors could be responsible for the change in demand shown in the graph? $3.5 $2.5 The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money $2.0 Expected inflation decreased. $3.0 Households began saving a greater percentage of their income. New technological advances opened up more production opportunities for businesses. 2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. ? D2 20 18 D1 Equilibrium 16 14 12 INTEREST RATE, (Percent) 10 8 $ 2 of 2 4 16 18 20 10 12 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed by billion. Which of the following factors could be responsible for the change in demand shown in the graph? The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money supply. Expected inflation decreased. Households began saving a greater percentage of their income. New technological advances opened up more production opportunities for businesses. 2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. ? D2 20 + 18 D1 Equilibrium 16 14 12 INTEREST RATE, r (Percent) 10 8 S 2 0 2 4 16 18 20 10 12 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed by billion. decreased Which of the following factors could be responsible for the change in demand shov bh? increased The Federal Reserve (the Fed) decided to relax its monetary policy and money supply. Expected inflation decreased. Households began saving a greater percentage of their income. New technological advances opened up more production opportunities for businesses. 2. The market for capital The following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increased over the last year (the demand curve shifted to the right). Place the black X at the equilibrium interest rate and the quantity of capital. ? 20 D2 + 18 D1 Equilibrium 16 14 12 INTEREST RATE, I (Percent) 10 8 S 2 0 0 2 4 16 18 20 10 12 14 CAPITAL (Billions of dollars) The market interest rate increased by 2.0%, and the amount of capital borrowed by billion. Which of the following factors could be responsible for the change in demand shown in the graph? $3.5 $2.5 The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money $2.0 Expected inflation decreased. $3.0 Households began saving a greater percentage of their income. New technological advances opened up more production opportunities for businesses