1. a)Draw a graph representing a loanable funds market. Assume inelastic supply of loanable funds. Make
2. sure to label axes, curves, and equilibrium. Write down equations for each of the curves.
3. b)Interpret the slope of the demand for loanable funds curve.
4. c)Interpret the slope of the supply of loanable funds curve.

In 2020, the COVID pandemic has spread around the world. Some substantial policy changes in response to the adverse effects of the pandemic in the US included an increase in spending on publicly provided medical tests and provision of stimulus checks to public ($1200 per person).

1. d)Focus on these two events only and illustrate them on your loanable funds model diagram.
2. e)What changes to the equilibrium can you predict with this model going from (a) to (d) and what is the
3. intuition for your predictions?