AP Macroeconomics 4.7 Loanable Funds Overview
Connect national saving and loanable-funds demand with investment, government borrowing, capital inflows, and equilibrium real interest rates.
- Syllabus
- Effective Fall 2025
- Course
- AP Macroeconomics
Covered syllabus points
MKT-4.A—a. Define (using graphs as appropriate) the loanable funds market, demand for loanable funds, and supply of loanable funds. b.…MKT-4.B—Define national savings in both a closed and an open economyMKT-4.C—Define (using graphs as appropriate) equilibrium in the loanable funds marketMKT-4.D—Explain (using graphs as appropriate) how real interest rates adjust to restore equilibrium in the loanable funds marketMKT-4.E—a. Explain (using graphs as appropriate) the determinants of demand and supply in the loanable funds market. b. Explain (using…
4.7 The Loanable Funds Market question 1
[Maximum number: 1]
The loanable funds market is best described as bringing together
A
savers and borrowers
B
investors and borrowers
C
financial institutions and investors
D
savers and lenders
E
banks and savers
A
4.7 The Loanable Funds Market question 2
[Maximum number: 1]
Assume that the economy of Moneyland is in equilibrium with an actual unemployment rate equal to the natural rate of unemployment.
How would the change in the policy rate shown on your graph in part (e) affect each of the following in Moneyland in the short run?
The quantity of national savings
(f)
For the first point, state that the quantity of national savings would decrease and the unemployment rate would decrease.
1 point
4.7 The Loanable Funds Market question 3
[Maximum number: 1]
． If the current real interest rate in the loanable funds market is greater than the equilibrium real interest rate，which of the following is most likely to occur？
A
（A） The real interest rate will decrease，causing borrowers to decrease the quantity demanded of loanable funds．
B
（B） The real interest rate will decrease，causing savers to increase the quantity supplied of loanable funds．
C
（C） The real interest rate will decrease，causing savers to decrease the quantity supplied of loanable funds．
D
（D） The real interest rate will increase，causing savers to increase the quantity supplied of loanable funds．
E
（E） The real interest rate will increase，causing borrowers to increase the quantity demanded of loanable funds．
C
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