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(Figure: Loanable Funds) Use Figure: Loanable Funds. Which scenario might produce a new equilibrium interest rate of 5% and a new equilibrium quantity of
(Figure: Loanable Funds) Use Figure: Loanable Funds. Which scenario might produce a new equilibrium interest rate of 5% and a new equilibrium quantity of loanable funds of $75 billion? (NOTE: Which curve must shift to allow that new equilibrium?) Interest rate 7% s $150 Quantity of loanable funds (billions of dollars) O The federal government runs a budget deficit rather than a budget surplus. O Capital inflows from foreign citizens increases. O The expected profitability of business investment declines. O Capital inflows from foreign citizens decline.
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