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Figure: The Market for Loanable Funds II
-(Figure: The Market for Loanable Funds II) Look at the figure The Market for Loanable Funds II. Other things being equal, if there is a decrease in the interest rate below 8%, _____ quantity of loanable funds will be demanded.

Question

Use the following to answer questions :
Figure: The Market for Loanable Funds II 
-(Figure: The Market for Loanable Funds II) Look at the figure The Market for Loanable Funds II. Other things being equal, if there is a decrease in the interest rate below 8%, _____ quantity of loanable funds will be demanded.

Quizplus · Accepted Answer

According to the figure, at an interest rate of 8%, the quantity of loanable funds demanded is shown as Q1. If the interest rate decreases below 8%, the quantity demanded increases and moves along the demand curve to a higher quantity (Q2), indicating that a larger quantity of loanable funds will be demanded.

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