Question

1. Assume that E-Wis is considering building a new factory and they need to borrow money from the financial market. a) Describe using a diagram, the impact on the market for loanable funds when E-Wis borrows money from the financial market.

b) How would an increase in interest rates affect E-Wis's decision in building the factory?​

Answer 1

(a) on a correctly labeled graph of the market for loanable funds