Multiple Choice
In a purely competitive market, the price per unit to a buyer equals:
3. The Market Forces of Supply and Demand
Market Equilibrium
Multiple Choice
A market in which savers determine the supply of loanable funds is called:
A
the loanable funds market
B
the goods and services market
C
the labor market
D
the foreign exchange market
Verified step by step guidance1
Understand the concept of the loanable funds market: it is a market where savers supply funds and borrowers demand funds for investment purposes.
Recognize that in this market, the supply curve represents the amount of savings available at different interest rates.
Identify that the demand curve in this market comes from borrowers who want to invest and need funds.
Note that the equilibrium interest rate is determined where the supply of loanable funds equals the demand for loanable funds.
Conclude that since savers determine the supply side of this market, the correct name for this market is the loanable funds market.
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