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12 September, 12:14

Suppose that the demand for loanable funds for car loans in the milwaukee area is $10 million per month at an interest rate of 10 percent per year, $11 million at an interest rate of 9 percent per year, $12 million at an interest rate of 8 percent per year, and so on. if the supply of loanable funds is fixed at $15 million, what will be the equilibrium interest

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  1. 12 September, 13:22
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    5 percent per year.

    Explanation:

    Base on the scenario been described in the question, where we saw the demand loanable funds for car loans in the milwaukee area is $10 million per month at an interest rate of 10 percent per year, $11 million at an interest rate of 9 percent per year, $12 million at an interest rate of 8 percent per year, if eventually the supply of loanable funds is fixed at $15 million, the equilibrium rate will be 5 percent per year because it is fixed
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