CEVAP:

Since the purchase of new capital is usually financed in the loanable funds market, a change in the demand for loanable funds follows a change in the demand for capital, and that influences the interest rate. A change in the interest rate, in turn, impacts the quantity of capital demanded on any demand curve. Therefore, the relationship between the demand for capital and the loanable funds market goes both ways. Changes in the demand for capital impacts the loanable funds market, and changes in the loanable funds market can alter the quantity of capital demanded.