A fall in the real interest rate
A) shifts the demand for loanable funds curve rightward.
B) creates a movement upward along the demand for loanable funds curve.
C) creates a movement downward along the demand for loanable funds curve.
D) shifts the demand for loanable funds curve leftward.

Question

Quizplus · Accepted Answer

A fall in the real interest rate makes borrowing cheaper, leading to an increase in the quantity of loanable funds demanded, which is represented by a movement downward along the demand curve.

A Fall in the Real Interest Rate