If the government introduces new tax incentives for private savings, what is the expected impact on the supply of loanable funds and equilibrium interest rates?

• A. Supply of loanable funds will decrease, and equilibrium interest rates will rise.
• B. Supply of loanable funds will increase, and equilibrium interest rates will fall.
• C. Supply of loanable funds will increase, and equilibrium interest rates will rise.
• D. Supply of loanable funds will decrease, and equilibrium interest rates will fall.

Answer: (B)