use the analysis for the market of loanble funds to illustrate and explain how the following government policy affect the economy's savings and investment. Policy 1: Suppose the government changes its tax code allowing individuals to reduce their taxable income if they save money in registered retirement savings plan. a. State and explain which loanable funds curve would this policy affect? b. What would be the impact on interest rates? Draw the loanable funds diagram to illustrate your answers for a to c.

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A: [a]

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Q: Suppose the government borrows $20 million more next year than this year. What happens to…

A: PLEASE FIND THE ANSWER BELOW.