As the _______ interest rate rises _______.
A)real; a movement occurs up along the demand for loanable funds curve
B)nominal; the demand for loanable funds curve shifts leftward
C)real; the demand for loanable funds curve shifts rightward
D)nominal; the demand for loanable funds curve shifts rightward
E)real; a movement occurs down along the demand for loanable funds curve

Question

Quizplus · Accepted Answer

When the real interest rate rises, it becomes more expensive for borrowers to take out loans, meaning that the demand for loanable funds decreases. This is represented by a movement up along the demand for loanable funds curve, as borrowers are willing to borrow less at each interest rate.

As the _______ Interest Rate Rises _______

As the _ Interest Rate Rises _