Use the supply and demand for loan able funds model

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Consider a closed economy. Use the supply and demand for loan able funds model to predict the effects of the following events on interest rates and investment.

a. The government introduces a tax credit for savings accounts of up to $5000 per year.

b. The government introduces a tax credit for savings accounts of up to $5000 per year, and at the same time it repeals an investment tax exemption provision.

c. The government raises the tax rates.

d. The government issues bonds worth $10 billion.

(Which way does the supply and demand shift for each of the above- left or right?)

Reference no: EM13736537

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