When the real interest rate rises
A) there is a downward movement along the demand for loanable funds curve.
B) the demand for loanable funds curve shifts rightward.
C) the demand for loanable funds curve shifts leftward.
D) there is an upward movement along the demand for loanable funds curve.

Question

Quizplus · Accepted Answer

When the real interest rate rises, it becomes more expensive to borrow, leading to a decrease in the quantity of loanable funds demanded, resulting in an upward movement along the demand curve.

When the Real Interest Rate Rises