What would happen in the market for loanable funds if the government were to decrease the tax rate on interest income?
a. the supply of loanable funds would shift right and investment would increase.
b. the supply of loanable funds would shift left and investment would decrease.
c. the demand for loanable funds would shift right and investment would increase.
d. the demand for loanable funds would shift left and investment would decrease.
Answer: A
Macroeconomics
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