Question

When the real interest rate is low, there are greater incentives to borrow and fewer incentives to lend. Justify your answer with examples

Answer 1

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   As such, the supply of loanable funds shows that the quantity of savings available will increase as the interest rate increases. Demand - The demand for loanable funds represents the behavior of borrowers and the quantity of loans demanded. The lower the interest rate, the less expensive it is to borrow.

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