4.4 Explain and show graphically how an increase in expected profits from firm investmentprojects affects the equilibrium interest rate and the equilibrium quantity of loanable funds.4.5 Explain and show graphically how an increase in government spending (i.e. budget deficit)affects the equilibrium interest rate in the market for loanable funds.
4.4 how am i supposed to show this, are there going to be two lines crossing over eachother?
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4.4 Explain and show graphically how an increase in expected profits from firm investment projects affects the equilibrium interest rate and the equilibrium quantity of loanable funds. 4.5 Explain and show graphically how an increase in government spending (i.e. budget deficit) affects the equilibrium interest rate in the market for loanable funds.
An increase in firm’s expected profits from an investment projects will reduce the demand for loanable funds as the firm will e...
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