The classification that most accurately reflects how it influences the equilibrium interest rate in the market for loanable funds.
Increase the interest rate:
Increasing the size of the major investment (it will shift the demand for the loanable fund to the right i.e. the new equilibrium loanable funds will be at a higher interest rate and higher quantity)
Investing tax credits (it will also shift the demand for the loanable fund to the right)
Decrease in the interest rate:
A decline in investor optimism is accompanied with an increase in saving.
The demand for the loanable cash will shift to the loanable funds left and the interest rate will decrease under both options.
The classification that most accurately reflects how it influences the equilibrium interest rate in the market for loanable funds.
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