Refer to the figure above. The curve in graph (b) O shows that the demand for imports is a downward-sloping function of the real interest rate. O is a part of the supply of loanable funds, which is the supply curve in graph (a). O shows how net capital outflow depends on the real exchange rate. O is a part of the demand for loanable funds, which is the demand curve in graph (a).

Refer to the figure above. The curve in graph (b) O shows that the demand for imports is a downward-sloping function of the real interest rate. O is a part of the supply of loanable funds, which is the supply curve in graph (a). O shows how net capital outflow depends on the real exchange rate. O is a part of the demand for loanable funds, which is the demand curve in graph (a).

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter17: Production And Growth

Section: Chapter Questions

Problem 5CQQ

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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) 10 8 O 0 Supply 100 200 300 400 500 600 Demand 700 800 LOANABLE FUNDS (Billions of dollars) 900 1000 ?
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