Question
Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Q
Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Qdpre-TILSA= 8 -80P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institutions was QSpre-TILSA= 4 + 80P (in billions of dollars). The TILSA now requires lenders to provide consumers with complete information about the rights and responsibilities of entering into a lending relationship with the institution, and as a result, the demand for loans increased to Qdpost-TILSA= 22 -80P (in billions of dollars). However, the TILSA also imposed "compliance costs" on lending institutions, and this reduced the supply of consumer loans to QSpost-TILSA= 2 + 80P (in billions of dollars).
Based on this information, compare the equilibrium price and quantity of consumer loans before and after the Truth in Lending Simplification Act.(Note: Q is measured in billions of dollars and P is the interest rate).
Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place.
Equilibrium price (interest rate) before TILSA: percent_____
Equilibrium quantity (in billions of dollars) before TILSA: $ billion________
Equilibrium price (interest rate) after TILSA: percent________
Equilibrium quantity (in billions of dollars) after TILSA: $ billion________
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