As interest rates decline, all of the following will result except
A) Quantity demanded of loanable funds increases.
B) Quantity supplied of loanable funds decreases.
C) Cost of borrowing diminishes.
D) Demand curve for money shifts to the left.

Question

Quizplus · Accepted Answer

As interest rates decline, the demand for money typically increases, which leads to a shift in the demand curve for money to the right, not to the left. Choices A, B, and C are all accurate statements about the impact of declining interest rates.

As Interest Rates Decline, All of the Following Will Result