An increase in the supply of loanable funds, all other things unchanged, will ________ the interest rate.

Name: An increase in the supply of loanable funds, all other things unchanged, will ________ the interest rate.
Brand: Quizplus
Rating: 4.9 (61 reviews)

Question

Quizplus · Accepted Answer

An increase in supply of loanable funds means more funds available for borrowing. With all other things unchanged, the increase in supply would lead to a decrease in the interest rate to encourage borrowers to take out more loans. Therefore, the correct answer is (C) "decrease".

An Increase in the Supply of Loanable Funds, All Other