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Figure: Market for Loanable Funds

-(Figure: Market for Loanable Funds)Equilibrium in this market for loanable funds occurs when the interest rate is:
A) 3%.
B) 4%.
C) 5%.
D) higher than 5%.

Question

Use the following to answer questions 
Figure: Market for Loanable Funds

-(Figure: Market for Loanable Funds)Equilibrium in this market for loanable funds occurs when the interest rate is:
A) 3%. 
B) 4%. 
C) 5%. 
D) higher than 5%.

Quizplus · Accepted Answer

Equilibrium in the market for loanable funds occurs at the interest rate where the quantity of loanable funds supplied equals the quantity of loanable funds demanded, which is at 4% in this scenario.

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