Refer to the Following Graph to Answer the Questions That

question 9

Multiple Choice

Refer to the following graph to answer the questions that follow.

-Assuming the figure represents the market for loanable funds,and that point C represents 40 and point D represents 80,then it would be true that:

• A) both points represent interest rates and there is a surplus of loanable funds at an 80% interest rate.
• B) both points represent interest rates and there is a shortage of loanable funds at an 80% interest rate.
• C) both points represent the quantity of loanable funds and there would be a surplus of loanable funds of 40 units.
• D) both points represent the quantity of loanable funds and at interest rate A there would be a shortage of loanable funds of 40 units.
• E) the quantity of loanable funds supplied exceeds the quantity demanded at interest rate B, if B represents an interest rate.

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