1. Explain how each of the following events would affect the supply of loanable funds curve:
a. The economy is in a recession so people’s disposable income is lower.
b. The stock market is booming so people’s wealth is higher.
c. The future looks a bit more grim, so expected future income is lower.
d. The real interest rate increases.
2. Why is the nominal interest rate the opportunity cost of holding money?
