Answer:
Increase, Decrease
Explanation:
As Tax increases, people are discouraged to save less due to the increase in cost of borrowing.
Anything that changes investment demand will change the demand for loanable funds. Examples of events that can shift the demand for loanable funds are :
Changes in the anticipated rate of return earned on investment spending
Government policies
There is an important implication of that first determinant of investment demand: real interest rates are pro cyclical. When the economy is doing well, the rate of return on any investment spending will increase. That means the demand for loanable funds will increase, which leads to a higher real interest rate. In other words, we would expect to see an increase in real interest rates, and the quantity of loans made, when the economy is doing well.
