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How does the loanable funds market DIFFER from Money Supply?
Loanable funds supply curve is vertical but money supply is unit elastic and slopes up to the right.
Loanable funds demand curve is horizontal and Money Supply is not.
Loanable funds refers to the supply and demand for funds available for lending and borrowing, while money supply is total money available for all purposes.
Interest rates in the loanable funds market are much lower than in the Money Supply market
Money banks lend to each other are what make up the loanable funds market, while the money supply consists of loans the U.S. government has made to finance debt.