the source of the supply of loanable funds as the iinterest rate falls the quantity of loanable

1. The source of the supply of loanable funds: The supply of loanable funds comes from individua

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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.

          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.

Added by Eric J.

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