00:01
So here we have a market for loanable funds, which i'm going to reproduce, right? it's a story about the interest rate and the quantity of loanable funds.
00:09
Here, the supply curve is drawn going through zero.
00:12
The demand curve is drawn like this, starting at eight.
00:16
And we have this equilibrium at an interest rate of four and loanable funds of 400.
00:25
So we've got a whole bunch of questions here, right? for a, the supply of loanable funds is largely coming from household savings, right? people earn money, and then they save money for all sorts of things, and the amount of money they save varies with the interest rate.
00:43
If banks are going to give savers a high interest rate, they're willing to save more money, right? so for b, as the interest rate falls, right, that is as we move down, b, a lower rate, implies a lower quantity of lf loanable funds supplied, right? when banks conversely are offering a lower interest rate, people are not going to be as willing to save money.
01:17
So now we're asked in c, what if ours actually equal to 4 .5%.
01:24
So you can see here that 4 .5 % is greater than equal...