1.2 Classical interest theory >The overall level of interest rates was determined by the supply of and demand for ads anable jund >Classical economists recognize that saving and investment are the two main factors, in the long run, which underlie the supply of and demand for loanable funds9.1.2 Classical interest theory ØThe overall level of interest rates was determined by the supply of and demand for loanable funds. ØClassical economists recognize that saving and investment are the two main factors, in the long run, which underlie the supply of and demand for loanable funds