If the interest rate is below equilibrium, then the quantity demanded of interest-bearing financial assets is less than the quantity supplied, so people selling interest-bearing financial assets have to offer higher interest rates to get people to buy them, thus raising interest rates back to the equilibrium level.

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When the interest rate is below equilibrium, the quantity demanded of interest-bearing financial assets is less than the quantity supplied. This means that there is an excess supply of interest-bearing financial assets, which puts downward pressure on interest rates. As a result, people selling interest-bearing financial assets have to offer higher interest rates to get people to buy them, thus raising interest rates back to the equilibrium level.

If the Interest Rate Is Below Equilibrium, Then the Quantity