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

-(Figure: Market for Loanable Funds)If the interest rate is 5% in this market for loanable funds,then:
A) savings exceeds investment by $200 million.
B) savings exceeds investment by $100 million.
C) savings exceeds borrowing demands by $200 million.
D) savings exceeds borrowing demands 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 5% in this market for loanable funds,then:
A) savings exceeds investment by $200 million. 
B) savings exceeds investment by $100 million. 
C) savings exceeds borrowing demands by $200 million. 
D) savings exceeds borrowing demands by $100 million.

Quizplus · Accepted Answer

At an interest rate of 5%, the quantity of loanable funds supplied (savings) is $600 million and the quantity of loanable funds demanded (borrowing demand) is $500 million. Therefore, savings exceeds borrowing demands by $100 million.

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