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

Graphing window shows horizontal axis: 0 to 13, vertical axis: 0 to 13. Start Graph, Color red

xy
02
13
24
35
46
57
68
79
810
911
1012
1113
1214
1315
Start Graph, Color blue
xy
08
17
26
35
44
53
62
71
80
9-1
10-2
11-3
12-4
13-5
Label "Quantity of Money" at pixel coordinates (175,0).Label "Interest rate" at pixel coordinates (0,170).Label "Demand" at (1,8+1). Label "Supply" at ((13-2)/ 1,11).

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.




 
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.




 
Hint