When the real interest rate increases,
A)the demand for loanable funds curve shifts leftward.
B)the supply of loanable funds curve shifts rightward.
C)there is a movement up along the supply of loanable funds curve.
D)the supply of loanable funds curve shifts leftward.
E)there is a movement down along the supply of loanable funds curve.

Question

Quizplus · Accepted Answer

An increase in the real interest rate does not shift the supply curve but causes a movement along the supply curve due to suppliers being willing to supply more at higher rates.

When the Real Interest Rate Increases