Suppose the U.S. offered a tax credit for firms that built new factories in the U.S. Then
A.
the demand for loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.
B.
the demand for loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.
C.
the supply of loanable funds would shift rightward, initially creating a surplus of loanable funds at the original interest rate.
D.
the supply of loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate.