At the equilibrium rate of interest,________.

Question

Quizplus · Accepted Answer

At the equilibrium rate of interest, the quantity of credit demanded equals the quantity of credit supplied. This means that there is no excess demand or excess supply of credit in the market. The equilibrium rate of interest is determined by the intersection of the demand and supply curves for credit, where the quantity of credit demanded by borrowers is equal to the quantity of credit supplied by lenders. Any deviation from this rate would result in either excess demand or excess supply of credit, leading to changes in the rate of interest to bring the market back to equilibrium.

At the Equilibrium Rate of Interest,________