Question

In a large open economy, why is the supply curve for loanable funds upward sloping?

Answer 1

The loanable fund supply curveshifts upward because higher interest rates increase the quantity of loanable fundssupplied. ... Because a lower real exchange rate stimulates net exports and thus increases the quantity of dollars demanded to pay for these net exports, the demand curve is downward sloping.


hope it hlps

Answer 2

The loanable fund supply curve that shift upwards because higher interest rates. It also describes the quantity of loanable funds supplied with ease.

Apart from this, it has a lower real exchange rate stimulates net exports and thus increased the quantity of dollars.

Moreover, demand curve is downward sloping and meets with perfect net exports.