Draw the graph · Macro · Loanable funds market

New technology spurs investment

Ddemand for loanable funds

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Ssupply of loanable funds

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Drag a curve sideways, or use its arrows. A curve you do not move is a curve you are saying stays put. Make each shift clear enough that a reader could see it.

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Demand for loanable funds shifts right. Supply of loanable funds stays put.

More profitable projects mean firms want to borrow more at every real interest rate. The demand for loanable funds shifts right. Supply is unchanged. The higher interest rate draws more saving out along the supply curve.

The real interest rate rises and more funds are borrowed.

Common mistake. Some students shift supply right because 'the economy has more to invest.' The technology changed what borrowers want to do, not how much savers offer.

More loanable funds market prompts

The government runs a deficit Households save more An investment tax credit Foreign savers lend here The government runs a surplus Firms turn pessimistic

Go deeper

Lesson: Limits of Fiscal Policy

Every prompt here is one shift. The course chains them: a lesson on why the curve moves, a graded drawing, and spaced review that brings back the shifts you get wrong.

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