Consider the figure below. The initial equilibrium in the loanable funds market in Etopia is at A. If the banks in Etopia begin to see an upsurge in deposits, this will result in a new equilibrium at what point?
A) Initially, point B with an increase in the interest rate, then point D with a decrease in the interest rate
B) Point B with an increase the interest rate
C) Point C with no change in the interest rate
D) Point D with a decrease in the interest rate
Correct Answer:
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