Equilibrium rate of interest To estimate the equilibrium rate of interest, the economics division of Mountain Banks-a major bank holding company-has gathered the data summarized in the following table:. Because the likelihood is high that new tax legislation will be passed in the near future, the table also includes current data as well as data reflecting the probable impact of passage of the legislation on the demand for funds. (Note: The proposed legislation will not affect the supply schedule of funds. Assume a perfect world in which inflation is expected to be zero, funds suppliers and demanders have no liquidity preference, and all outcomes are certain.) a. Select the graph that correctly represents the supply and demand curves using the current data. (Note: Unlike the functions in Figure 6.1, the functions here will not appear as straight lines.) b. Using your graph, label and note the equilibrium rate of interest using the current data. c. Add to the graph drawn in part a the new demand curve expected in the event that the proposed tax legislation is passed. d. What is the new equilibrium rate of interest? Compare and analyze this finding in light of your analysis in part b. a. Which of these graphs correctly represents the supply and demand curves using the data shown in the table? (Select the best answer below.) Data table (Click on the icon here 2 in order to copy the contents of the data table below into a spreadsheet.) Equilibrium rate of interest To estimate the equilibrium rate of interest, the economics division of Mountain Banks-a major bank holding company-has gathered the data summarized in the following table:. Because the likelihood is high that new tax legislation will be passed in the near future, the table also includes current data as well as data reflecting the probable impact of passage of the legislation on the demand for funds. (Note: The proposed legislation will not affect the supply schedule of funds. Assume a perfect world in which inflation is expected to be zero, funds suppliers and demanders have no liquidity preference, and all outcomes are certain.) a. Select the graph that correctly represents the supply and demand curves using the current data. (Note: Unlike the functions in Figure 6.1, the functions here will not appear as straight lines.) b. Using your graph, label and note the equilibrium rate of interest using the current data. c. Add to the graph drawn in part a the new demand curve expected in the event that the proposed tax legislation is passed. d. What is the new equilibrium rate of interest? Compare and analyze this finding in light of your analysis in part b. a. Which of these graphs correctly represents the supply and demand curves using the data shown in the table? (Select the best answer below.) Data table (Click on the icon here 2 in order to copy the contents of the data table below into a spreadsheet.)
