Answer: c) There would be an increase in demand; the demand curve shifts right.
Explanation:
With tax credits on offer, companies would have an incentive to invest more in new projects that can bring money into the company because they know they will pay less taxes on it.
To invest in these new projects they will need capital and will turn to the loanable funds market. This will increase the demand for loans and so shift the demand curve for loans to the right.
