Suppose the real interest rates in the United States and Switzerland are both 2%. Now suppose that the Federal Reserve in the United States conducts monetary policy that in turn raises domestic interest rates. Assume there are no policy changes in Switzerland and that their real interest rates stay steady at 2%.

Suppose the federal government runs a surplus and the Federal Reserve purchases bonds from banks with the excess funds. Use the graph to show what happens to the federal government's supply of loanable funds