Video 4

This video is about Loanable funds. (money available for people to borrow from banking system.) Price is on vertical axis, and quantity is on the x axis. Its the quantity of loanable funds. Demand for loanable is downward sloping bc when interest rate is lower, people demand more money. Supply of loanable funds is upward sloping. (Easy graph to start with) Supply of loanable funds is dependent on savings. The more money people save, the more money banks can use for loans. Demand graphs can show you if you made a mistake when creating the loanable funds graph. If the govt is running a deficit, then the government is demanding money in order to spend it. If money is demanding more money, then the demand graph shifts to the right.