Asked Oct 2, 2019

After reading the given descriptions, please place the correct label by the quadrant on the graph that best describes each person's position in the market for loanable funds.

  • Jolien decides not to take out a loan to fund expanding her grocery store because she projects it will only earn a return of 4%4%.
  • Osi closely follows the market for United States Treasury Bonds. He is willing to invest in them anytime the rate of return is 5%5% or higher, and sees that this is the case.
  • In order to open a new car wash facility expected to return 13%13%, Julius secures a loan.
  • John will shift his stock investments to corporate bonds when they return at least 10%10%. They do not, so he stays with stocks
Quantity of loanable funds (billions of dollars)
Answer Bank
Interest rate (%)

Image Transcriptionclose

S 8.0- Quantity of loanable funds (billions of dollars) Answer Bank Osi Julius John Jolien Interest rate (%)


Expert Answer

Step 1

Person Jol demands loan in this case. The amount of loan demanded by her lies on the lower portion of the demand curve.

Person O is the supplier of loanable funds in this case because she wants to invest, and she will supply the loan at an interest rate of 5% or higher which lies in the lower portion of the supply curve.

Person Ju demands loan a...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in




Related Economics Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: The demand curve for a product is given by QDx = 1,200 – 3Px – 0.1Pz, where Pz=$300. a) What is the...

A: Own price elasticity of demand is the measure of change in the quantity demanded of a product due to...


Q: In the foreign currency market for U.S. dollars: Which of the following would be correct?  U.S. r...

A: Foreign exchange markets are markets where currencies are bought (demanded) or sold (supplied). Such...


Q: If the base year is 1970 and the 2016 price index is 135, purchases of $7,000 of goods in the base y...

A: Price Index = 135Base year purchase price = $7000 


Q: .  A U.S. corporation, after performing due diligence, hires a foreign agent to negotiate contracts ...

A: The FCPA is the Foreign Corrupt Practices Act which is a law enforced by the congress in 1977 to pun...


Q: Find the marignal and average function for the total functions.  Total product function: Q = aL + bL...

A: The marginal product function states the relationship between the additional quantities produced whe...


Q: Describe some of Hamilton's contributions to U.S. financial policies.

A: To discuss the contributions by Hamilton to the U.S. financial policies.


Q: uncovered interest parity

A: The interest rate parity implies that the expected return from two countries will equalized by the c...


Q: Question number 2.7 and 2.8

A: Answer - Dear student thank you for submitting your question .Since we answer only one of the multip...


Q: two types of consumers( workers an retirees) share a community with a polluting cheese factory. the ...

A: a.The externalities caused by the cheese factory are adverse and are negative externalities. Thus, t...