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

-Trading in the market for loanable funds determines the equilibrium:
A) level of savings.
B) amount of borrowing.
C) interest rate.
D) level of savings,amount of borrowing,and interest rate.

Question

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

-Trading in the market for loanable funds determines the equilibrium:
A) level of savings. 
B) amount of borrowing. 
C) interest rate. 
D) level of savings,amount of borrowing,and interest rate.

Quizplus · Accepted Answer

The market for loanable funds determines the equilibrium level of savings, amount of borrowing, and interest rate, as these elements are interrelated. The interest rate adjusts to balance the supply of savings with the demand for borrowing.

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