For each case, describe the effect on the market for loanable funds

  1. An increase in technology: ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).
  2. A decrease in investor sentiments: ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).
  3. An increase in consumer confidence: ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).
  4. An increase in consumer patience: ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).
  5. New (larger) investment tax credits for businesses: ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).
  1. Perhaps due to a tax cut, there’s an increase in disposable income: ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).
  2. Government increases the deficit (or begins to run a deficit, or reduces the surplus): ( Demand for / Supply of ) Loanable Funds will ( Increase / Decrease). This creates a potential funds ( shortage / surplus ) and the market will adjust ______( higher / lower ). Overall, investment is now ( higher / lower ) and thus economic growth is ( faster / slower ).