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How Do the Following Factors Affect the Loanable Funds Market

Question 119

Essay

How do the following factors affect the loanable funds market? Use graphs to illustrate your answers.
(a) The government implements a policy that makes college education free, and this causes parents to increase their saving.
(b) The government institutes tax breaks on funds that are saved.
(c) The government designs a program to encourage consumption in the economy, which lowers saving.

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