QUESTION 8 Figure 26-4 This figure shows the loanable funds market for a closed economy.

QUESTION 8Figure 26-4This figure shows the loanable funds market for a closed economy.33INTEREST RATE (Percent)F12AD-4D-D.60120180LOANABLE FUNDS (Dollars)Refer to Figure 26-4. Starting at point A, the enactment of an investment tax credit would likely cause the quantity of loanable funds traded toO a. decrease to $60 and the interest rate to fall to 4% (point B)b. increase to $180 and the interest rate to fall to 4% (point D).c. decrease to $60 and the interest rate to rise to 12% (point E).O d. increase to $180 and the interest rate to rise to 12% (point C).







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