4. Factors that affect equilibrium in the market for loanablefunds For each of the given scenarios, use the graphs to (1) show what happens in the market for loanable funds and (2) help answer the questions that follow. Scenario 1: Individual Retirement Accounts (IRAS) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is a decrease in the maximum contribution, from $5,000 to $3,000 per year: This chanpe couses savers to supply loanable funds. Because the quantity of loanable funds supplied is now the quantity of loanable funds demanded, there is pressure on interest rates. This change in interest rates causes a(n) in the quantity of loanable funds demanded. Scenarie 2: An investment tax credit effectively lowers the taxes paid by firms that purchase new equipment or buald a new manufacturing facilf. Suppose the government implements a new invhstment tax credit. Scenario 2: An investment tax credit effectively lowers the taxes paid by firms that purchase new equipment or build a new manufacturing faclity. Suppose the government implements a new investment tax credit. The implementation of a new tax credit causes borrowers to dernand loanable funds. Because the quantity of loanabie funds demanded is now the quantity of loanable funds supplied, there is a(n) in the quantity of loanable funds supplied