I. (a) What is a loanable funds market? Explain. (b) Who and for what purpose: (i) demands loanable funds in the closed economy; (ii) supplies loanable funds in the closed economy. Give your explanations. (c) Draw a correctly labeled loanable funds market graph. Explain the slopes of the demand for loanable funds FD curve and of the supply of loanable funds FS curve. II. What will happen in the loanable funds market as a result of each of the events listed below (points from (i) to (xii)). In each case determine either the event inuences the demand for loanable funds or the supply of loanable funds and in what direction (increases or decreases) and give your explanations. In each case show the changes on the correctly labeled loanable funds graph. (i) The news about layoffs make consumers fear for their jobs. (ii) The investment tax credit was implemented in the economy. (iii) The size of government social payments has been considerably increased. (iv) Consumers wealth increased by 5%. (v) The government undertakes an income tax cut. (vi) Firms are pessimistic about the future macroeconomic situation. (vii) It is announced, that due to medical advances everyone can count on more years of retirement than ever before. (viii) The government increases deficit spending. (ix) The Central bank decreases the supply of money. (x) The government imposes an effective interest rate ceiling; (xi) The government decreases part of expenditures on education and medical care. (xii) There is the rise in the availability of advanced, more efcient technology. Instruction: Do not rewrite the tasks, put you answers in the following table The change in the demand for loanable funds The direction and the The change on the loanable FD or in the suppl of loanable funds F S explanation of the chan_e funds market _raph a _