Answer:
The correct option is that the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is below equilibrium
Explanation:
There would be surplus of loanable funds if the quantity supplied is more than that demanded, hence the knock on effect of that is that interest would be below equilibrium.
Judging from the law of demand and supply, when quantity supplied increases the price moves downward.
A typical example in the world today is that oil producing nations are supplying more of crude oil in the world oil market whereas the demand is slowing down as businesses are locked down due COVID-19 menace and the price fell from about $65 per barrel to less than $30
Answer:
The quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is below equilibrium
Explanation:
For there to be a surplus of loanable funds available the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and also a decrease in the interest rate.
this is strictly obeying the law of demand and supply which states that the increase in supply without a corresponding increase in demand will cause a decrease in equilibrium price of a commodity. for the availability of surplus loanable funds the supply for the loans must be greater than the demand for the loans
