The supply curve of loanable funds is upsloping because

Question

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The upsloping supply curve of loanable funds is due to the fact that households are willing to save more at high interest rates than they are at low interest rates. As interest rates increase, the opportunity cost of spending money or consuming today becomes higher, and people are encouraged to save more to take advantage of the higher returns. Conversely, when interest rates are low, the opportunity cost of saving becomes lower, and people are less willing to save. Thus, the supply of loanable funds increases as interest rates rise.

The Supply Curve of Loanable Funds Is Upsloping Because