Final answer:
The quantity of loans increases with either a rise in demand for loans or a rise in the supply of loanable funds. Interest rates generally decline when there is a rise in the supply of funds. A price ceiling does not directly shift demand or supply but can create market imbalances.
Step-by-step explanation:
When considering changes in the financial market, two primary forces influence the quantity of loans made and received: the demand for loans and the supply of loanable funds. For the quantity of loans to increase, there must be a rise in loan transactions between lenders and borrowers. This scenario can transpire from either a rise in the demand for loans, where more borrowers are seeking funds, or a rise in the supply of loans, where more funds are available for lending. In the context of financial markets, an increase in the supply of loanable funds typically leads to more loans being made and received because lenders have more capital to lend to borrowers.
Regarding interest rates, these tend to decline when there is a rise in the supply of loanable funds. More available funds decrease the 'price' of borrowing, which is the interest rate. In a labor market with flexible wages, equilibrium (lapping of wage We and quantity Qe) is achieved when the supply of labor (S) matches the demand for jobs (D).
A price ceiling is a regulation that sets a maximum price on a good or service. Its imposition does not usually shift the demand or supply directly but can lead to shortages or surpluses if set above or below the market equilibrium. A price ceiling set below equilibrium might increase demand due to lower prices but does not shift the demand curve itself.