LT 10 Assessment Answer the guiding questions below EACH scenario to demonstrate proficiency on the learning target. Scenario 1: The economy enters a recession driving down the demand for homes nationwide. 1. What is the expected impact on the demand for loanable funds? 2. What effect will this change have on the interest rate? 3. How will this change the behavior of consumers? Scenario 2: The government increases deficit spending by $100 Billion dollars to invest in green energy throughout the country. 1. What effect will this have on the demand for loanable funds? 2. What effect will this change have on the interest rate? 3. How will this change the behavior of consumers? Scenario 3: Unemployment decreases throughout the country causing a dramatic increase in income for millions of Americans. Causing Americans to save more. 1. What is the likely effect of this increase in income on the supply of loanable funds? 2. What effect will this change have on the interest rate? 3. How will this change the behavior of consumers?