How would I graph investment demand, saving supply, and equilibrium?

Question

I am horrid at making graphs because half the time I don't understand what they show. How would I make a graph for the investment demand, savings supply, and equilibrium?

Answer 1

On a standard X - Y graph, dollars would be on the X axis and interest rate would be on the Y - axis. As the interest rate increases, the supply of savings available for investment increases, which would lead to a line moving up and to the right.

As interest rates rise, on the other hand, the demand for investment dollars decline, since fewer projects provide an adequate return. This is expressed as a line moving down and to the right.

The equilibrium point is where these two lines intersect. This is where the amount of savings provided at a given rate of return is equal to the amount of investment demanded at the same rate of return.

Hopefully this helps.

Answer 2

Investment Demand Graph

Answer 3

Your goal is to have an "X"

Supply decreases in increments.
Demand increases in increments.
The point where Supply and Demand meet is the equilibrium.

Excell: Two rows, Supply & Demand

Supply - Demand
50 - 0
40 - 10
30 - 20
20 - 30
10 - 40
0 - 50
High light data & hit "Graph". Pick line graph.
Equalibruim is 25.