PLEASE HELP ME WITH THE GRAPH PORTION & CHECK MY ANSWERS. THANK YOU IN ADVANCE.

Question

PLEASE HELP ME WITH THE GRAPH PORTION & CHECK MY ANSWERS. THANK YOU IN ADVANCE.

4. 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, real GDP, the price level, and the expected inflation rate.

True or False: The income effect describes the change in the interest rate due to a change in the real GDP.

True O False The following graph shows the supply and demand curves in the market for loanable funds. Consider an increase in the real GDP. Show the effect of this increase by dragging one or both curves on the graph LF SLF LF QUANTITY OF LOANABLE FUNDS

Explanation / Answer

Answer)

The first selected answer is right which is true.

2nd)

In the second answer there will be a rightward shift in supply curve. so and leftward shift in demand curve so that the interest rate would decline as demand is inverly proportional to rate of interest.

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