The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
Section: Chapter Questions
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PLEASE ANSWER ALL QUESTIONS NOT JUST SOME

PLEASE WRITE THE EXACT NUMBERS FOR THE GRAPH.

PLEASE READ CAREFULLY, THIS MAY BE A SIMILAR QUESTION, BUT ALL QUESTIONS ARE DIFFERENT

3. Supply and demand for loanable funds
The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of
loanable funds, and the downward-sloping blue line represents the demand for loanable funds.
7
Supply
Demand
100
200
300
400
500
600
700
800
LOANABLE FUNDS (Billions of dollars)
Investment
Saving
is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds
supplied
decreases
greater
increases
less
Suppose the interest rate is 3.5%. Based on the previous graph, the quantity of loanable funds supplied is
than the quantity of raise
loans demanded, resulting in a
of loanable funds. This would encourage lenders to
the interest rates they charge,
the quantity of loanable funds supplied and
thereby
market toward the equilibrium interest rate of
the quantity of loanable funds demanded, moving the Hower
increasing
decreasing
incréasing
surplus
decreasing
shortage
INTEREST RATE (Percent)
Transcribed Image Text:3. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. 7 Supply Demand 100 200 300 400 500 600 700 800 LOANABLE FUNDS (Billions of dollars) Investment Saving is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied decreases greater increases less Suppose the interest rate is 3.5%. Based on the previous graph, the quantity of loanable funds supplied is than the quantity of raise loans demanded, resulting in a of loanable funds. This would encourage lenders to the interest rates they charge, the quantity of loanable funds supplied and thereby market toward the equilibrium interest rate of the quantity of loanable funds demanded, moving the Hower increasing decreasing incréasing surplus decreasing shortage INTEREST RATE (Percent)
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