The equilibrium interest rate a. equates the aggregate demand for funds with the aggregate supply of loanable funds. b. equates the elasticity of the aggregate demand and supply for loanable funds. c. decreases as the aggregate supply of loanable funds decreases.

The correct answer is option a.

Explanation:

The equilibrium interest rate is determined by the interaction of aggregate demand for loanable funds and aggregate supply of loanable funds. In other words, at the level of equilibrium interest rate, the aggregate demand for loanable funds is equal to aggregate supply of loanable funds. Any change in these two variable causes the equilibrium interest rate to change.

The answers for the subdivisions are given below and are explained. Explanation:

1)

it consists of a table refer the attachment

it has the list of asserts, liabilities and common stock

2)

(i) 32000

(ii) 11000

(iii) 38000

3)

The table in attached, it explains the prepaid expenses , common stock , dividends , insurance expenses ,  Insurance expenses, Accounts payable, service revenue.

4)

Refer the tables are attached it explains the Accounts receivable, common stock, rent payable. insurance expense , interest revenue and dividends.

5)

1.Equity at the beginning of the year = 27000 - 15000 = 8000

2. Equity at the end of the year 60,000 - 27,000 = 33000

3. Increase in equity = 33000 - 8000 = 25000

Net Income = 25000 + 37300 - 6300 = 56000  

4. Common stock = 25000 + 6000 - 1100 = 29900  

5. Dividends = 19600 + 19100 - 25000 = 13700

6. Net Income = 25000 + 42900 - 3400 = 64500