1.(assume consumption levels remain unchanged) Gov. wish to gain more public app

Question

1.(assume consumption levels remain unchanged) Gov. wish to gain more public approval and decreases personal income tax rate for all levels,replace these revenues with higher corporate income tax on investment. Following to occur in the loanable funds market?

a.decrease in the supply of loanable fund & decrease in demand for loanable funds

b.increase in both the supply and demand of loanable funds

c.increase in supply of loanable funds, no change in demand for loanable funds

d.increase in supply of loanable funds,decrease in the demand for loanable funds

Explanation / Answer

d.increase in supply of loanable funds,decrease in the demand for loanable funds

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