Figure 66 Alt Text for Figure 6

question 247

Multiple Choice

Figure 6.6 Alt text for Figure 6.6: In figure 6.6, a graph shows loanable funds market in equilibrium.
Long description for Figure 6.6: The x-axis is labelled, quantity of loanable funds (millions of dollars) , ranging from 0 to 180 in increments of 30.The y-axis is labelled real interest rate, ranging from 0 to 6% in increments of 1.2 intersecting lines are shown.A line labelled D begins at the top left corner and slopes down toward the end of the x-axis.Another line labelled S begins near the origin and slopes upward to the top right corner.5 points are plotted on these two lines as (90, 5) , (90, 3) , (120, 4) , (150, 5) , (150, 3) .These points are connected to their respective coordinates on the x-axis and y-axis using dotted lines.
-Refer to Figure 6.6.The market is in equilibrium.If the government budget deficit rises, which of the following would you expect to see?

• A)The quantity of loanable funds demanded by firms will rise above $120 million.
• B)The quantity of loanable funds demanded by firms will fall below $120 million.
• C)The budget deficit will have no impact on the quantity of loanable funds demanded by firms.
• D)The interest rate will fall below 4 percent.
• E)The interest rate will rise about 10 percent.

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