Thank you for visiting Assuming the market for loanable funds is in equilibrium use the following numbers to determine the quantity of loanable funds supplied GDP 8 7 trillion. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
gdp $8.7 trillion in consumer expenditures Taxes minus transfers totaling $3.2 trillion Government spending of $2.7 trillion $2.5 trillion is 3% of $3 trillion.
How do you find the equilibrium quantity of loanable funds?
- Equilibrium - The amount of savings that savers contribute equals the amount of loans that borrowers demand, achieving equilibrium in the market for loanable funds. To equalize these, the interest rate is changed.
- Those who have chosen to save some of their money rather than spending it—including members of the government and companies—instead of investing it are the source of the loanable funds. Lending money to borrowers at a rate of interest is one approach to generate investment income.
- When the real interest rate is such that the demand for borrowing equals the supply of savings, equilibrium is reached in the market for loanable funds.
Therefore the correct answer is option c ) $2.5 trillion .
To learn more about equilibrium refer to :
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