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Supply and demand curve are graphed, where the x-axis is the quantity of loanable funds and the y-axis is the real interest rate. The supply
Supply and demand curve are graphed, where the x-axis is the quantity of loanable funds and the y-axis is the real interest rate. The supply curve is an upward sloping line, and the demand curve is a downward sloping line. These two lines intersect hear the middle of the graph at point A. A second supply curve, parallel to the first but shifted to the right, crosses the demand curve at point B. Point B represents a lower real interest rate and a higher quantity of loanable funds. Which of the following is consistent with the graph depicted above? Group of answer choices An expected recession decreases the profitability of new investment. The government runs a budget deficit. Technological change increases the profitability of new investment. Taxes are changed so that real interest income is taxed rather than nominal interest income
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