When Will a Change in the Tax Laws That Increases

Multiple Choice

When will a change in the tax laws that increases the supply of loanable funds have a bigger effect on investment?

A) when the demand for loanable funds is more elastic and the supply of loanable funds is more inelastic
B) when the demand for loanable funds is more inelastic and the supply of loanable funds is more elastic
C) when both the demand for and supply of loanable funds are more elastic
D) when both the demand for and supply of loanable funds are more inelastic