The supply of loanable funds is the relationship between the quantity of loanable funds supplied and ________, other things remaining the same.

Question

Quizplus · Accepted Answer

The supply of loanable funds is affected by the real interest rate. When the real interest rate increases, people are incentivized to save more, causing the supply of loanable funds to increase. Conversely, when the real interest rate decreases, people are less likely to save, causing the supply of loanable funds to decrease. Real GDP, the price level, inflation rate, and nominal interest rate may all impact the demand for loanable funds, but they do not directly impact the supply.

The Supply of Loanable Funds Is the Relationship Between the Quantity