Task:
Relax the assumption of inelastic supply of loanable funds, that is,assume supply is elastic.
- Draw the new loanable funds market diagram(Excel) and illustrate the expected effect of the myRA introduction.
- Label both axes, all curves, and write out expressions for demand and supply of loanable funds.
- Explain the economic meaning of the slope of the supply curve. Express the slope of each curve using derivatives.