Graph the demand and supply for loanable funds. If there is an increase in income, ceteris paribus, show what happens to the interest rate, the demand for loanable funds, and the quantity supplied of loanable funds. If the Fed orchestrates a decrease in the money supply growth rate, ceteris paribus, show what happens to the interest rate, the supply of loanable funds, and the quantity demanded of loanable funds.
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