The supply of loanable funds has a ________ slope because the greater the interest rate, the ________ the reward to saving, and the ________ the quantity of loanable funds supplied.

Question

Quizplus · Accepted Answer

The supply of loanable funds has a positive slope because as the interest rate increases, the reward for saving increases, leading to a greater quantity of loanable funds supplied. Higher interest rates make saving more attractive, encouraging more people to save and thus increasing the supply of loanable funds.

The Supply of Loanable Funds Has a ________ Slope Because