is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is demanded, resulting in a of loanable funds. This would encourage lenders to the quantity of loanable funds supplied and the equilibrium interest rate of than the quantity of loans the interest rates they charge, thereby the quantity of loanable funds demanded, moving the market toward

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied
Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is
demanded, resulting in a
of loanable funds. This would encourage lenders to
the quantity of loanable funds supplied and
the equilibrium interest rate of
than the quantity of loans
the interest rates they charge, thereby
the quantity of loanable funds demanded, moving the market toward
Transcribed Image Text:is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied Suppose the interest rate is 5.5%. Based on the previous graph, the quantity of loanable funds supplied is demanded, resulting in a of loanable funds. This would encourage lenders to the quantity of loanable funds supplied and the equilibrium interest rate of than the quantity of loans the interest rates they charge, thereby the quantity of loanable funds demanded, moving the market toward
5. 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.
INTEREST RATE (Percent)
12
11
10
10
3
2
1
0
Supply
Demand
100 200 300 400 500 600 700 800 900 1000 1100 1200
LOANABLE FUNDS (Billions of dollars)
Transcribed Image Text:5. 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. INTEREST RATE (Percent) 12 11 10 10 3 2 1 0 Supply Demand 100 200 300 400 500 600 700 800 900 1000 1100 1200 LOANABLE FUNDS (Billions of dollars)
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