Refer to the figure below to answer the following questions.

Figure 23.2.4
-Refer to Figure 23.2.4.In Figure 23.2.4,the economy is at point A on the supply of loanable funds curve SLF0.What happens if the real interest rate rises?

Question

Refer to the figure below to answer the following questions.
  
Figure 23.2.4
-Refer to Figure 23.2.4.In Figure 23.2.4,the economy is at point A on the supply of loanable funds curve SLF0.What happens if the real interest rate rises?

Quizplus · Accepted Answer

When the real interest rate rises, the quantity of loanable funds supplied increases and the quantity demanded decreases, resulting in a movement along the supply of loanable funds curve to a new equilibrium point, such as point B on the same curve. Therefore, option B is the correct answer. Options A, C, D, and E are incorrect because they do not accurately depict the impact of a rise in real interest rates on the supply of loanable funds curve.

Refer to the Figure Below to Answer the Following Questions