Scenario 2: An investment tax credit effectively lowers the taxes paid by firms that purchase new equipment or build a new manufacturing facility. Suppose the government repeals a previously existing investment tax credit. Market for Loanable Funds o S DA SA INTEREST RATE D A LOANABLE FUNDS The repeal of a previously existing tax credit causes borrowers to demand demanded is now the quantity of loanable funds supplied, there is interest rates causes a(n) in the quantity of loanable funds supplied. loanable funds. Because the quantity of loanable funds pressure on interest rates. This change in Scenario 2: An investment tax credit effectively lowers the taxes paid by firms that purchase new equipment or build a new manufacturing facility. Suppose the government repeals a previously existing investment tax credit. Market for Loanable Funds o S DA SA INTEREST RATE D A LOANABLE FUNDS The repeal of a previously existing tax credit causes borrowers to demand demanded is now the quantity of loanable funds supplied, there is interest rates causes a(n) in the quantity of loanable funds supplied. loanable funds. Because the quantity of loanable funds pressure on interest rates. This change in