Use the following to answer question 79:
-(Table: Loanable Funds)Use Table: Loanable Funds.At what interest rate will loanable funds market be in equilibrium?

Question

Use the following to answer question 79: 
-(Table: Loanable Funds)Use Table: Loanable Funds.At what interest rate will loanable funds market be in equilibrium?

Quizplus · Accepted Answer

At an interest rate of 5%, the quantity of loanable funds supplied (500) is equal to the quantity of loanable funds demanded (500). This is the point of equilibrium in the loanable funds market. At any interest rate above or below 5%, there will be either a surplus or a shortage of loanable funds, which will lead to changes in the interest rate until equilibrium is reached at 5%.

Use the Following to Answer Question 79