Use the loanable-funds model to connect saving, borrowing, investment, fiscal balances, and capital flows with equilibrium real interest rates.
The loanable funds market is best described as bringing together
savers and borrowers
investors and borrowers
financial institutions and investors
savers and lenders
banks and savers
A
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
． 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） The real interest rate will decrease，causing borrowers to decrease the quantity demanded of loanable funds．
（B） The real interest rate will decrease，causing savers to increase the quantity supplied of loanable funds．
（C） The real interest rate will decrease，causing savers to decrease the quantity supplied of loanable funds．
（D） The real interest rate will increase，causing savers to increase the quantity supplied of loanable funds．
（E） The real interest rate will increase，causing borrowers to increase the quantity demanded of loanable funds．
C