Refer to the following graph to answer the following questions:
-In the figure,line 1 represents ________,line 2 represents ________,and 5 percent represents ________.

Question

Refer to the following graph to answer the following questions: 
-In the figure,line 1 represents ________,line 2 represents ________,and 5 percent represents ________.

Quizplus · Accepted Answer

Line 1 represents savings because it is the source of funds that can be lent in the financial market. Line 2 represents the demand for loanable funds because it shows the interest rate that borrowers are willing to pay for funds. 5 percent represents the equilibrium interest rate because it is where the supply and demand curves intersect, indicating the quantity of loanable funds supplied by savers equals the quantity of loanable funds demanded by borrowers.

Refer to the Following Graph to Answer the Following Questions