Graph Input Tool 12 Interest Rate 6 Supply (Percent) 10 Quantity 250 Quantity supplied demanded (Millions of dollars) 250 (Millions of dollars) 8 6 Demand Shifter Supply Shifter INTEREST RATE (Percent) Expected Inflation (percent) 0 Expected Inflation (percent) 0 Demand 2 100 200 300 400 500 LOANABLE FUNDS (Millions of dollars) If the expected inflation rate increases to 2%, then the demand for loanable funds will increase _ and the supply of loanable funds will decrease When the expected inflation rate is zero, the money interest rate is 6% . Thus, an expected inflation rate of 2% results in a money interest rate of 6% and a real interest rate of 6%Graph Input Tool (? Supply 12 Interest Rate 6 (Percent) 10 Quantity 333 Quantity supplied 167 demanded ( Millions of dollars) (Millions of dollars) Demand Shifter Supply Shifter INTEREST RATE (Percent) Demand Expected Inflation 2 Expected Inflation 2 (percent) (percent) 2 100 200 300 400 500 LOANABLE FUNDS (Millions of dollars) If the expected inflation rate increases to 2%, then the demand for loanable funds will increase _ and the supply of loanable funds will decrease When the expected inflation rate is zero, the money interest rate is 6% . Thus, an expected inflation rate of 2% results in a money interest rate of 6% and a real interest rate of 6% _