Investment is the source of the supply of loanable funds. As the interest rate rises, the quantity of loanable funds supplied increases Suppose the interest rate is 2.5%. Based on the previous graph, the quantity of loanable funds supplied is________ than the quantity of loans 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_____ omework (Ch 13) ? 6 5 Supply INTEREST RATE (Percent) 3 N Demand 0 600 100 200 300 400 500 LOANABLE FUNDS (Billions of dollars)
Previous question