In the loanable funds market,

Question

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The loanable funds market is a conceptual framework where the price of loans is determined by the interest rate. The demand curve in this market reflects the behavior of borrowers (who demand funds for investment or consumption) and not lenders, while the supply curve reflects the behavior of lenders (who supply funds). When interest rates rise, it becomes more expensive to borrow, which typically leads to a decrease in the amount borrowed by firms, not an increase.

In the Loanable Funds Market