Explore BrainMass

Explore BrainMass

    the equilibrium interest rate

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Using a figure similar to Figure 14-11, explain how the money market and the loanable funds market react to a reduction in the supply in the short-run.

    See Attached

    © BrainMass Inc. brainmass.com October 9, 2019, 9:11 pm ad1c9bdddf


    Solution Preview

    In the attached diagram, both the money market and the loanable funds market are initially in equilibrium at the same rate of interest, r1. A decrease in the money supply shifts the ...

    Solution Summary

    The equilibrium interest rate is assessed.