O Demand Supply Supply INTEREST RATE (Percent) Demand LOANABLE FUNDS (Billions of dollars)Registered retirement savings plans (RRSPs) allow people to shelter some of their income from taxation. Suppose the maximum annual contribution to such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, from $5,000 to $8,000 per year. Shift the appropriate curve on the graph to reect this change. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to V and the level of investment spending to V . An investment tax credit effectively lowers the tax bill of anyr firm that purchases new capital in the relevant time period. Suppose the government implements a new investment tax credit. Shift the appropriate curve on the graph to reect this change. The implementation of the new tax credit causes the interest rate to V and the level of saving to V . Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defence spending without changing taxes. This change in spending causes the government to run a budget V , which V national saving. Shift the appropriate curve on the graph to reect this change. This causes the interest rate to V , V the level of investment spending. Registered retirement savings plans (RRSPs) allow people to shelter some of their income from taxat such accounts is $5,000 per person. Now suppose there is an increase in the maximum contribution, Shift the appropriate curve on the graph to reflect this change. This change in the tax treatment of saving causes the equilibrium interest rate in the market for loan investment spending to decrease An investment tax credit lowers the tax bill of any firm that purchases new capital in the re implements a new inves increase redit. Shift the appropriate curve on the graph to reflect this change. The implementation of the new tax credit causes the interest rate to and the level of saving tople to shelter some of their income from taxation. Suppose the maximum annual contribution to e is an increase in the maximum contribution, from $5,000 to $8,000 per year. change. quilibrium interest rate in the market for loanable funds to and the level of fall of any firm that purchases new capital in the relevant time rise suppose the government change. terest rate to and the level of saving tocurve on the graph to reflect this change. of the new tax credit causes the interest rate to and the level of saving to fall ent's budget is balanced, then the government s to the conclusion of a war by significantly reducing defence es. rise ing causes the government to run a budget , which national saving.e graph to reflect this change. ax credit causes the interest rate to and the level of saving to t is balanced, then the government responds to the conclusion of a fall significantly reducing defence spending rise the government to run a budget , which national saving.of the new tax credit causes the interest rate to and the level of saving to ment's budget is balanced, then the government responds to the conclusion of a war by significantly reducing defence s xes. ding causes the government to run a budget , which national saving. deficit e curve on the graph to reflect this change. surplus rest rate to the lever or investment spending.the graph to reflect this change. tax credit causes the interest rate to and the level of saving to jet is balanced, then the government responds to the conclusion of a war by significantly reducing defence spending the government to run a budget , which national saving. increases the graph to reflect this change. decreases the level of investment spendingThe implementation of the new tax credit causes the interest rate to and the level of saving to Initially, the government's budget is balanced, then the government responds to the conclusion of a war by significantly reduci without changing taxes. This change in spending causes the government to run a budget which national saving. fall Shift the appropriate curve on to rise to reflect this change. This causes the interest rate to the level of investment spending.The implementation of the new tax credit causes the interest rate to and the level of saving to Initially, the government's budget is balanced, then the government responds to the conclusion of a war by sign without changing taxes. This change in spending causes the government to run a budget , which national increasing Shift the appropriate curve on the grap crowding out change. This causes the interest rate to the level of investment spending