The following graph shows the supply of and demand for

Last updated: 6/11/2023

The following graph shows the supply of and demand for capital in a market over the last year You can see that the demand for capital has increased over the last year the demand curve shifted to the right Place the black X at the equilibrium interest rate and the quantity of capital INTEREST RATE r Percent 20 18 16 14 12 10 8 2 D2 D1 0 0 2 4 14 16 18 20 6 10 12 6 8 CAPITAL Billions of dollars Equilibrium The market interest rate increased by 2 0 and the amount of capital borrowed Which of the following factors could be responsible for the change in demand shown in the graph by The Federal Reserve the Fed decided to relax Its monetary policy and expanded the money supply O Expected inflation decreased billion