Can a borrower become a saver?

Complete the following statements. a. Dan saves a portion of his income in an interest-earning account. In the loanable funds market, Dan is    b. John owns a pizzeria and needs to borrow money for a new oven. In the loanable funds market, John is    c. Savers like Dan are likely to save more when the real interest rate    . Therefore, the supply of loanable funds    Look at images for word bank  . d. Borrowers like John are likely to borrow more when the real interest rate     . Therefore, the demand for loanable funds    .

3. Read the quote below. Then answer the following questions. [Beginning of Quote] Europeans Are Paid to Borrow but Get a Bill for Trying to Save. By DANNY HAKIM and PETER EAVIS. NYT, link. HVIDOVRE, Denmark-At first, Eva Christiansen barely noticed the number. Her bank called to say that Ms. Christiansen, a 36-year-old entrepreneur here, had been approved for a small-business loan. She whooped. She danced. A friend took pictures. "I think I was so happy I got the loan, I didn't hear everything he said," she recalled. And then she was told again about her interest rate. It was -0.0172 percent per year-less than zero. While there would be fees to pay, the bank would also pay interest to her. It was just a little over $1 a month, but still. [End of Quote] (a) How large was the loan that was approved? 1 (b) Given the information provided, can you conclude that overall the interest rate at which Ms. Christiansen is borrowing is negative? Is there a pure arbitrage opportunity one could…

If the Money Supply increases, what happens in the Market for Loanable funds? Draw the graph. Make sure to label the axes.