In the loanable funds market, the supply of loanable funds is positively sloped because of the: positive relationship between the real interest rate and the quantity demanded of loanable funds. inverse relationship between the real interest rate and the quantity supplied of loanable funds. positive relationship between the real interest rate and the quantity supplied of loanable funds. inverse relationship between the real interest rate and the quantity demanded of loanable funds.
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The demand for loanable funds refers to the amount of funds that borrowers are willing to borrow at different interest rates. Now, let's consider the relationship between the real interest rate and the quantity demanded of loanable funds. When the real interest Show more…
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The source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied increases. Suppose the interest rate is 3.59. Based on the previous graph, the quantity of loanable funds supplied is greater than the quantity of loans demanded, resulting in an excess supply of loanable funds. This would encourage lenders to lower the interest rates they charge, thereby increasing the quantity of loanable funds supplied and decreasing the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate.
Lottie A.
If the quantity of loanable funds supplied is greater than the quantity demanded, then there is a a. surplus of loanable funds and the interest rate will rise. b. surplus of loanable funds and the interest rate will fall. c. shortage of loanable funds and the interest rate will fall. d. shortage of loanable funds and the interest rate will rise
Jennifer S.
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