Using the loanable funds model, demonstrate graphically and explain the changes in "i" and total lending. Note: each letter
should be considered independent of the other letters and worked on separate graphs .
a. Households become more thrifty at the same time the federal government announces a significant decrease in military operations in Afghanistan and the Middle East.
b. The public believes the President’s pledge to fight future inflation and this results in a drop in the expected inflation rate from 16% in the U.S. to 2%.
Dear Student Please find... View the full answer