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 Supply a 8 3 2 1 0 0 Demand 100 200 300 400 500 600 700 800 900 1000 1100 1200 LOANABLE FUNDS (Billions of dollars) (?) is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied than the quantity of loans 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 interest rates they charge, thereby the quantity of loanable funds supplied and the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of %
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 Supply a 8 3 2 1 0 0 Demand 100 200 300 400 500 600 700 800 900 1000 1100 1200 LOANABLE FUNDS (Billions of dollars) (?) is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied than the quantity of loans 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 interest rates they charge, thereby the quantity of loanable funds supplied and the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of %
Chapter21: Financial Markets, Saving, And Investment
Section: Chapter Questions
Problem 9P
Related questions
Question
![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
Supply
a
8
3
2
1
0
0
Demand
100 200 300 400 500 600 700 800 900 1000 1100 1200
LOANABLE FUNDS (Billions of dollars)
(?)
is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied
than the quantity of loans
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 interest rates they charge, thereby
the quantity of loanable funds supplied and
the quantity of loanable funds demanded, moving the market toward
the equilibrium interest rate of
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff80f80c8-579a-4aa9-999b-124ef0a2976c%2F62f0ecea-478c-4e47-beb7-f0b2cd119527%2F0wbo85q_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
Supply
a
8
3
2
1
0
0
Demand
100 200 300 400 500 600 700 800 900 1000 1100 1200
LOANABLE FUNDS (Billions of dollars)
(?)
is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied
than the quantity of loans
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 interest rates they charge, thereby
the quantity of loanable funds supplied and
the quantity of loanable funds demanded, moving the market toward
the equilibrium interest rate of
%
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