(Answer all of the following, and please show how to do the shift on the graph :
ID: 1202555 • Letter: #
Question
(Answer all of the following, and please show how to do the shift on the graph :) .)
The money supply, the loanable funds market, and interest rates Changes in the money supply affect the interest rate through changes in the supply of loans, the real GDP, the price level, and the expected inflation rate. True or False: The expectations effect describes the change in the interest rate due to a change in the price level. False True The graph below shows the supply and demand curves in the market for loanable funds. Consider an increase in the price level. Show the effect of this increase by dragging one or both curves on the graph below. Which of the following refer to changes that affect both supply and demand in the loanable funds market? Check all that apply. The price-level effect The income effect The expectations effect The liquidity effectExplanation / Answer
False
DLF shifts Right
The Demand for Loanable funds(DLF) curve will shift to the right (parellel) as price level increases , more money is required to purchase the same product , thus Demand for money increases and DLF shifts right
Tick all four as All four Apply
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