Question

Suppose that, prior to the passage of the truth in Lending Simplifaction Act and Regulation Z, the demand for consumer loans was given by Qd pre-TILSA = 14-130P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institution was Qs pre - TILSA = 6 + 70P (in billions of dollars). The TILSA now requires lenders to provide consumers with complete information about the rights and responsibilities of entering into a lending relationship with the institution and as a result, the demand for loans increased to Qd post-tilsa = 22 - 130P (in billions of dollars). However, the TILSA also imposed "compliance costs" on lending institutions, and this reduced the supply of consumer loans to QS post-TISLA = 2 + 70P (in billions of dollars).

Based on this information, compare the equilibrium price and quantity of consumer loans before and after the Truth in Lending Simplification Act. (Note: Q is measured in billions of dollars and P is the interest rate)

Equilibrium price (interest rate) before TILSA: ___ percent

Equilibrium quantity (in billions of dollars) before TILSA: $___ billion

Equilibrium price (interest rate) after TILSA: ___ percent

Equilibrium quantity (in billions of dollars) after TILSA: $__ Billion

Answer 1

Page No.: Pruor OD l4-13.P (4-130P-6 TOP 2ooP B elox TLSA G.04 25 bemplut mfrmaras CD' 22-130P 22-130P 2+70p 20 oP 20 2-0 O.1 75 200 af dr TLSA 4auo 2 2-180l0.=9 1