Use the Following to Answer Questions

question 268

Multiple Choice

Use the following to answer questions:
-(Figure: The Market for Loanable Funds II) Use Figure: The Market for Loanable Funds II. Other things being equal, an increase in taxes on savings and investment income will shift _____ to the _____ and _____ the interest rate.

• A) demand; right; increase
• B) demand; left; decrease
• C) supply; right; decrease
• D) supply; left; increase

---

Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive.

Trade

The exchange of goods, services, or both between two or more parties, either within a country or between countries.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service relative to what they actually pay.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, reflecting the producer's benefit.