Graphically illustrate using the market for loanable funds the effect of the following scenarios. In your graphs be sure to clearly label the axes and the curves. Label the initial equilibrium point as Point "A" and the new equilibrium point as Point "B".

(a) Suppose that the Kansas legislature passes a law which lowers income taxes. One consequence of this new law is that interest earned on savings accounts and bonds will now be taxed at a lower tax rate.

(b) The COVID-19 shutdown has battered the California state economy resulting in massive deficit in the state budget