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How Would the Equilibrium Quantity of Loanable Funds Respond to a Change

Question 110

Multiple Choice

How would the equilibrium quantity of loanable funds respond to a change from an income tax to a consumption tax?


A) The equilibrium quantity of loanable funds would rise.
B) The equilibrium quantity of loanable funds would fall.
C) The equilibrium quantity of loanable funds would be unaffected.
D) The equilibrium quantity of loanable funds may rise or fall based on whether household saving increases or decreases as a result of the change from an income tax to a consumption tax.

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