Unlike the supply of loanable funds, the demand for capital is unrelated to the interest rate.

Question

Quizplus · Accepted Answer

The demand for capital is positively related to the interest rate, meaning that as interest rates decrease, the demand for capital increases and vice versa. This is because lower interest rates make borrowing cheaper, and therefore more attractive for businesses and individuals looking to invest in projects that require capital.

Unlike the Supply of Loanable Funds, the Demand for Capital