Question

Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Qdpre-TILSA = 6 -100P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institutions was QSpre-TILSA = 5 + 100P (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 Qdpost-TILSA = 20 -100P (in billions of dollars). However, the TILSA also imposed “compliance costs” on lending institutions, and this reduced the supply of consumer loans to QSpost-TILSA = 3 + 100P (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).

Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place.

Equilibrium price (interest rate) before TILSA: 0.5 percent

Equilibrium quantity (in billions of dollars) before TILSA: $ 5.5 billion

Equilibrium price (interest rate) after TILSA: __ percent

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

(first two answers are correct, I just need help with parts 3 and 4)

Answer 1