What would make the equilibrium interest rate decrease and the equilibrium quantity of funds increase?
A) The supply of loanable funds shifts right.
B) The supply of loanable funds shifts left.
C) The demand for loanable funds shifts right.
D) The demand for loanable funds shifts left.

Question

Quizplus · Accepted Answer

When the supply of loanable funds shifts right, it means there are more funds available at every interest rate. This would lead to a decrease in the equilibrium interest rate due to the increased competition among lenders to attract borrowers. At the same time, the equilibrium quantity of funds will increase because there are more funds available for borrowers to borrow.

What Would Make the Equilibrium Interest Rate Decrease and the Equilibrium