investment, savings) is the source of the demand for loanable funds. As the interest rate falls, the quantity of loanable funds demanded (decrease , increase) . Suppose the interest rate is 2.5%. Based on the previous graph, the quantity of loanable funds supplied is (greater, less) than the quantity of loans demanded, resulting in a (surplus, shortage) of loanable funds. This would encourage lenders to (rise, lower) the interest rates they charge, thereby (decrease , increase) the quantity of loanable funds supplied and (decrease , increase) the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of _____%

investment, savings) is the source of the demand for loanable funds. As the interest rate falls, the quantity of loanable funds demanded (decrease , increase) . Suppose the interest rate is 2.5%. Based on the previous graph, the quantity of loanable funds supplied is (greater, less) than the quantity of loans demanded, resulting in a (surplus, shortage) of loanable funds. This would encourage lenders to (rise, lower) the interest rates they charge, thereby (decrease , increase) the quantity of loanable funds supplied and (decrease , increase) the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of _____%

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter8: Business Organizations

Section: Chapter Questions

Problem 10AA

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