Loanable Funds: Definition & Theory


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question 1 of 3

Which one of the following is the best explanation of loanable funds?

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1. What determines the supply of loanable funds?

2. What determines the demand for loanable funds?

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About This Quiz & Worksheet

This quiz/worksheet combo will check your knowledge of loanable funds by testing you on the definition of the phrase, and also on supply, demand, price and interest rates related to loanable funds.

Quiz & Worksheet Goals

In these assessments you'll be tested on:

  • How interest rates are determined under the loanable funds market theory
  • Another name for the price of loanable funds
  • The meaning of a loanable fund
  • How the supply and demand of loanable funds are determined

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related loanable funds lesson
  • Making connections - use understanding of the concept of supply and demand
  • Information recall - access the knowledge you've gained regarding the theory of loanable funds
  • Knowledge application - use your knowledge to answer questions about how supply, demand, and interest rates are determined in regards to loanable funds

Additional Information

To learn more about the theory of loanable funds, check out the accompanying lesson on Loanable Funds: Definition & Theory. This lesson covers the following objectives:

  • Define loanable funds
  • Understand loanable funds as a market theory
  • Learn how the supply, demand and market price of loanable funds are determined
  • Recognize the loanable fund market at equilibrium as represented on a graph