Refer to the Following Graph to Answer the Following Questions

question 13

Multiple Choice

Refer to the following graph to answer the following questions:
-Assuming the figure represents the market for loanable funds,it would be true that

• A) line 1 represents savings (supply),and line 2 represents investment (demand).
• B) the vertical axis represents the interest rate,and the distance between points C and D represents the surplus of loanable funds at interest rate A.
• C) line 1 represents investment demand,and line 2 represents savings.
• D) the vertical axis represents the quantity of funds lent and borrowed,whereas the distance between points C and D represents the shortage of loanable funds at interest rate A.
• E) line 1 represents the interest rate,and line 2 represents the quantity of savings.

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Definitions:

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