Question: Question 2 (0) Using examples, explain clearly the rationale behind the relationship between demand for loanable fund and interest rate and the relationship between supply

Question 2 (0) Using examples, explain clearly the rationale behind the

Question 2 (0) Using examples, explain clearly the rationale behind the relationship between demand for loanable fund and interest rate and the relationship between supply of loanable fund and interest rate. (10 M) (ii) The Covid-19 pandemic and the Russia-Ukraine war are causing the commodities prices to surge all around the globe. By using a diagram, analyse how rising prices can affect interest rates in Mauritius. (10 M) (iii) Explain the effect of increased Government deficit on the Government demand for loanable fund. (5 M) Question 2 (0) Using examples, explain clearly the rationale behind the relationship between demand for loanable fund and interest rate and the relationship between supply of loanable fund and interest rate. (10 M) (ii) The Covid-19 pandemic and the Russia-Ukraine war are causing the commodities prices to surge all around the globe. By using a diagram, analyse how rising prices can affect interest rates in Mauritius. (10 M) (iii) Explain the effect of increased Government deficit on the Government demand for loanable fund. (5 M)

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