The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. is the source of the demand for loanable funds. As the interest rate falls, the quantity of loanable funds demanded Suppose the interest rate is 4.5\%. Based on the previous oraph, the quantity of loanabie funds supgled it than tee guastity ar iso' demanded, resuiting in a of loanable funds. This would encocrage lenders to the interest rates ther charge, therety the quantity of loanable funds suppled and the quaritity of foanable fands semandes, mevitg tis market tonary the equilibriuct intarest rate of