In the loanable funds market, if the interest rate is above the equilibrium level
A) there is a surplus of loanable funds.
B) expected profit falls.
C) there is a shortage of loanable funds.
D) government expenditure decreases.

Question

Quizplus · Accepted Answer

When the interest rate is above the equilibrium level, the quantity of loanable funds supplied exceeds the quantity demanded, resulting in a surplus.

In the Loanable Funds Market, If the Interest Rate Is