The supply of loanable funds increases while the demand for loanable funds remains constant.This would cause

Question

Quizplus · Accepted Answer

When the supply of loanable funds increases while demand remains constant, the equilibrium interest rate will decrease and the equilibrium quantity of loanable funds will increase. This is because with a larger supply of funds, lenders will have to compete with each other to attract borrowers, which will lead to a decrease in interest rates. At the same time, borrowers will be more willing to borrow at the lower interest rate, which will increase the quantity of loanable funds.

The Supply of Loanable Funds Increases While the Demand for Loanable