Why is the supply of loanable funds upward sloping

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Reference no: EM131099446

In a large open economy, why is the supply of loanable funds upward sloping?

1. A lower interest rate makes borrowing more expensive.

2. A lower real interest rate encourages people to save.

3. A higher real interest rate encourages people to save.

4. A higher real interest rate discourages domestic consumers from buying foreign assets.

Reference no: EM131099446

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