If the expected rate of return decreases
A)The demand for loanable funds will increase.
B)The demand for loanable funds will decrease.
C)Market participants will save less money.
D)The time value of money will increase.

Question

Quizplus · Accepted Answer

When the expected rate of return decreases, lenders will be less willing to lend money at lower rates of return. This will decrease the demand for loanable funds.

If the Expected Rate of Return Decreases