If there is an increase in the demand for financial capital in the loanable funds market, the interest rates would rise, and the quantity of financial capital exchanged would increase.Question 6Answera.True.b.False

Which of the following would likely increase the supply of financial capital in the loanable funds market?Question 2Answera.An increase in interest rates.b.A decrease in government borrowing.c.A decrease in private savings.d.An increase in consumer spending.

In the loanable funds market, the supply of financial capital comes from:Question 7Answera.Savers and investors.b.Borrowers seeking loans.c.The central bank.d.The government.

When interest rates in the financial markets rise, we would generally expect the quantity demanded of financial capital to:Question 10Answera.Decrease.b.Increase.c.Stay the same.d.Be unaffected.Clear my choice

Demand for money in the money market is _____, while in the loanable funds market to demand for money is ____.

Explain how the following will affect• the investment decision,• the demand for loanable funds and• the interest rate in the loanable funds market.In your answer refer to the figure provided as appropriate and identify the correct change inthe investment and the interest rate. (Start from point A in Figure 3).Figure 3 Loanable funds marketDuring the test, you will be asked this question with a different example.ExampleThe depreciation rate in the economy increases.*********************************************************************************************************