_{econ 1p92}

2. Using a supply and demand diagram, explain how each of the following scenarios impacts the market for loanable funds. Show your work, and be specific about what happens to the equilibrium. (10% each) (a) The government increases its debt, thus crowding out the loanable funds market. (b) The government starts a program that makes it easier for new homeowners to take out a mortgage- (c) Technological improvements increase the profitability of investments for firms. (d) People's values change, and they start to save more of their income