In the market for loanable funds, the law of supply shows that more people will choose to _______ at _______ interest rates.

Question

Quizplus · Accepted Answer

The law of supply states that as prices (in this case, interest rates) increase, suppliers (in this case, savers) will be more willing and able to supply more of the good (in this case, loanable funds). Therefore, more people will choose to save at higher interest rates, indicating choice C as the correct answer.

In the Market for Loanable Funds, the Law of Supply