To estimate the equilibrium rate of interest, the economics division of Mountain Banksa major bank holding companyhas gathered the data summarized in the following table: LOADING... . Because the likelihood is high that new tax legislation will be passed in the near future, the table also includes current data as well as data reflecting the probable impact of passage of the legislation on the demand for funds.(Note: The proposed legislation will not affect the supply schedule of funds. Assume a perfect world in which inflation is expected to be zero, funds suppliers and demanders have no liquidity preference, and all outcomes are certain.)

What is the new equilibrium rate of interest? Compare and analyze this finding in light of your analysis in part b.

Data Table X (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) With passage Currently of tax legislation Interest rate Amount of funds Interest rate required by Interest rate supplied/demanded required by funds required by ($ billion) funds suppliers demanders funds demanders $ 1 2% 7% 9% 5 3 6 8 10 4 4 7 20 6 6 50 7 2 100 9 1 3 4 3 Print Done b. Using the point drawing tool on the right, point out the equilibrium rate of interest on the graph. Oon Real Rate of Interest (%) D. 10 ot 0 25 50 75 100 Funds Supplied/Demanded ($) billion