Question

The equilibrium in the market for loanable funds is: Multiple Choice where the amount being borrowed and the amount being saved is the same. at the interest rate set by the Fed. where the amount being saved is enough for banks to cover required reserves. at the price at which the quantity supplied is slightly greater than quantity demanded.

Answer 1

The market for loanable fund shows how the loans taken from the savers are allocated to the borrowers who have investment project in an economy. Thus it is obvious that the equilibrium in the loanable fund Market will happen when the amount being borrowed and amount being saved in an economy,the interest rate adjustment of the market makes these two things equal.

Rate 7n 2 ss foro fund i all - eg. int rate 90 = eq. quantity of loanable fund. DD for fund Quantity of loanable fund