AP MacroeconomicsFinancial Sector & Loanable Funds
Loanable Funds Market
The market where savers supply funds and borrowers demand funds for investment, determining the real interest rate.
The supply comes from private and public saving, while demand comes from borrowers seeking loans for investment. The equilibrium real interest rate balances saving and investment. Shifts in either curve change the interest rate and the quantity of loanable funds.
Interactive graph
Loanable Funds →
Drag the curves and see it for yourself.
Study module
The Loanable Funds Market →
Full lesson, practice questions, and flashcards.