Question

A key principle of economics is that if there is a properly functioning financial system and interest rates are free to adjust, then at equilibrium in the loanable funds market: Not yet answered Points out of 100 Select one: a. There will be no debt Pa b. The amount of debt will equal the amount of cash in the economy c. The amount saved will be more than they amount borrowed d. The amount saved will equal the amount borrowed

Answer 1

D. The amount saved will equal the amount borrowed

Step-by-step explanation:

Answer 2

Answer: D. The amount saved will equal the amount borrowed

Explanation: The loanable funds market Is the market where borrowing happens.

The loanable fund market is subject to the amount of savings and the amount of borrowing available at any point in time which must be at equilibrium.

It is at the state of equilibrium in the loanable funds market that the amount of money saved must be equal to the amount borrowed. This will give rise to the interest rates adjusting itself.