Question: Question 2. (25 points) a) Draw a graph representing a loanable funds market. Assume inelastic supply of loanable funds. Make sure to label axes, curves,

Question 2. (25 points) a) Draw a graph representing a loanable funds market. Assume inelastic supply of loanable funds. Make sure to label axes, curves, and equilibrium. Write down equations for each of the curves. b) Interpret the slope of the demand for loanable funds curve. c) Interpret the slope of the supply of loanable funds curve. In 2020, the COVID pandemic has spread around the world. Some substantial policy changes in response to the adverse effects of the pandemic in the US included an increase in spending on more generous unemployment insurance benets and publicly provided COVID vaccination. d) Focus on these two events only and illustrate them on your loanable funds model diagram. Explain your answer. e) Describe how Equilibrium (d) is different from Equilibrium (a). Provide economic intuition for the equilibrium change

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