In the loanable funds framework,the demand curve of loanable funds is
A)downward-sloping.
B)upward-sloping.
C)mound-shaped.
D)u-shaped.

Question

Quizplus · Accepted Answer

The demand curve for loanable funds is downward-sloping because as the interest rate decreases, borrowers are more willing to invest and demand more funds. As the interest rate increases, the cost of borrowing becomes higher, reducing the quantity demanded.

In the Loanable Funds Framework,the Demand Curve of Loanable Funds