1. First of all, when the demand elasticity in loanable funds is high, the interest rate rise caused by the increase of government borrowing by 20 billion dollars will crowd out a lot of investment.

2. Secondly, when the demand elasticity of loanable funds is small, the increase of government borrowing will only reduce a small part of private investment.

Finally, when the market interest rate rises, the supply in loanable funds will greatly increase, especially private savings. This is how the elasticity of demand in loanable funds affects the extent of these changes.