Use the following to answer questions: 
-(Figure: Loanable Funds) Use Figure: Loanable Funds. Which scenario might produce a new equilibrium interest rate of 8% and a new equilibrium quantity of loanable funds of $75 billion?
A) Capital inflows from foreign citizens decline.
B) The federal government runs a budget deficit, rather than a surplus.
C) Profit expectations for business investments become less optimistic.
D) The government eliminates taxes on income from interest earned.
Correct Answer:
Verified
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