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Figure: Market for Loanable Funds

-(Figure: Market for Loanable Funds)If the interest rate is 3% in this market for loanable funds,then:
A) investment exceeds savings by $200 million.
B) investment exceeds savings by $100 million.
C) borrowing demands exceed savings by $200 million.
D) borrowing demands exceed savings by $100 million.

Question

Use the following to answer questions 
Figure: Market for Loanable Funds

-(Figure: Market for Loanable Funds)If the interest rate is 3% in this market for loanable funds,then:
A) investment exceeds savings by $200 million. 
B) investment exceeds savings by $100 million. 
C) borrowing demands exceed savings by $200 million. 
D) borrowing demands exceed savings by $100 million.

Quizplus · Accepted Answer

At an interest rate of 3%, the borrowing demands exceed savings by $100 million, indicating a shortage in the market for loanable funds.

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