The quantity of loanable funds demanded increases so there is a movement downward along the demand for loanable funds curve when
A)the pool of loanable funds falls.
B)the real interest rate falls.
C)business expectations become more optimistic.
D)the expected profit from investment decreases.

Question

Quizplus · Accepted Answer

When the real interest rate falls, borrowing becomes cheaper, leading to an increase in the quantity of loanable funds demanded, resulting in a movement downward along the demand curve.

The Quantity of Loanable Funds Demanded Increases So There Is