Suppose that the demand for loanable funds for car loans in the Milwaukee area is $11 million per month at an interest rate of 10 percent per year, $12 million at an interest rate of 9 percent per year, $13 million at an interest rate of 8 percent per year, and so on. Instructions: Enter your answers as whole numbers. a. If the supply of loanable funds is fixed at $17 million, what will be the equilibrium interest rate? percent per year.
b. If the government imposes a usury law and says that car loans cannot exceed 3 percent per year, how big will the monthly shortage (or excess demand) for car loans be? $ million worth of car loans per month.
c. What if the usury limit is raised to 7 percent per year? $ million worth of car loans per month.