The explanation for the slope of the
A)supply of loanable funds curve is based on the logic that a higher real interest rate leads to higher saving.
B)demand for loanable funds curve is based on the logic that a higher interest rate leads to higher saving.
C)supply of loanable funds curve is based on the logic that a higher real interest rate leads to lower saving.
D)demand for loanable funds curve is based on the logic that a higher interest rate leads to lower saving.

Question

Quizplus · Accepted Answer

The supply of loanable funds curve is upward sloping because a higher real interest rate provides more incentive for individuals to save, thus increasing the quantity of loanable funds supplied.

The Explanation for the Slope of the