When the real interest rate increases,
A) the supply of loanable funds curve shifts rightward.
B) there is a movement downward along the supply of loanable funds curve.
C) there is a movement upward along the supply of loanable funds curve.
D) the supply of loanable funds curve shifts leftward.

Question

Quizplus · Accepted Answer

When the real interest rate increases, there is a movement upward along the supply of loanable funds curve because higher interest rates provide more incentive for savers to supply funds.

When the Real Interest Rate Increases