The market for loanable funds in Oceania is in equilibrium.
Based on this statement, which of the following is true?
Choose 1 answer:
(A) The amount of borrowing that borrowers want is equal to the amount of savings that savers save.
(B) The interest rate is increasing, attracting more savers into the market.
(c) The interest rate is decreasing, discouraging more borrowers from entering the market.
(D) Nominal interest equals real interest.
(E) People want to hold exactly how much money is in the money supply.

Question

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ The market for loanable funds in equilibrium means that the quantity of loanable funds supplied equals the quantity of loanable funds demanded. ‖ ‖ step 2 ⋮ This implies that the amount of borrowing that borrowers want is equal to the amount of savings that savers save. ‖ ***A*** ∻Key Concept∻ ⚹Market equilibrium in loanable funds⚹ ∻Explanation∻ ⚹In the market for loanable funds, equilibrium is achieved when the amount of funds that savers are willing to save equals the amount of funds that borrowers are willing to borrow.⚹◊What statistical methods could be used to analyze the relationship between interest rates and borrowing/saving behaviors in the loanable funds market?⍭ Generate me a similar question◊

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