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In the market for loanable funds: a.     Who supplies funds? (1 point) b.     Who demands funds?...

In the market for loanable funds:

a.     Who supplies funds? (1 point)

b.     Who demands funds? (1 point)

c.     What is the price of funds? (2 point)

d.     How is the quantity of funds measured? (2 point)

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Answer #1

a. The major source of supply is savings which includes people, organizations, government and business who have decided not to spend money.
b. Demand is for investments which includes firms for capital investments, consumption etc
c. The intersection of demand and supply represents the price which can be termed as interest rate or cost of borrowing
d. The equilibrium quantity is measured at the intersection of demand and supply

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