Describe the the loanable funds theory

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Question: If the Federal Reserve decided to contract the money supply, under the loanable funds theory, using the loanable funds theory what would be the effect on the real equilibrium interest rate in the U.S. (In your description describe or show with a graph the change in the supply curve for loanable funds and the change in its intersection with the demand curve for loanable funds).

Reference no: EM131974084

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