Suppose the U.S. offered a tax credit for firms that built new factories in the U.S. Then the
A) demand for loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.
B) demand for loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.
C) supply of loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.
D) supply of loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.
Correct Answer:
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Q204: Figure 26-1
The figure depicts a demand-for-loanable-funds curve
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