Use a simple diagram of the loanable funds market to show how a sudden fall in income of the consumers or households of a country (with no other changes taking place in the economy) affect the real interest rate. Make sure to draw a very neat diagram. Label it properly. Use color pens to show any shifts of curves. Take a picture or scan and upload your diagram in the space below.

Answer rating: 100% (QA)

1 Start by drawing the loanable funds market graph with the real interest rate on the vertical axis and the quantity of loanable funds on the horizont... View the full answer