Loanable Funds

Money available in the banking system for people to borrow

                   Price = Y

Quantity of Funds = X 

Supply Slopes Upward

Demand Slopes Downward

Supply of lonable funds- Dependant on savings

Government deficit- government is demanding money = shift demand to the right(increase Demand of lonable funds)

When deficit- you have an increase in demand for lonable funds the intrest rate goes up.