Lumen OHM Assessment

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The graph below shows the supply and demand curves in the market for credit card borrowing.

What is the equilibrium interest rate?

Hint

Suppose that individuals shift their intertemporal consumption-savings decisions and decide to buy more things now. Which graph most accurately shows how this would affect demand and supply for borrowing money with credit cards? Note that the new curve is shown in gray.

Demand curve shifts right:

Demand curve shifts left:

Supply shift left and Demand curve shift right:

Supply and Demand curves shifts left:

Hint

Suppose that consumers have a major change in their consumption/savings preferences. As a result of a serious recession they decide to consume less and save more. Which graph most accurately shows how this would affect demand and supply for borrowing money with credit cards? Note that the new curves are shown in gray.

Supply and Demand curves shift left:

Supply curve shifts right and Demand curve shifts left:

Demand curve shifts left:

Demand curve shifts right:

Hint