There is a _____ relationship between the amount of loanable funds demanded and the rate of interest.

Question

Quizplus · Accepted Answer

The relationship between the amount of loanable funds demanded and the rate of interest is negative. As the rate of interest increases, the cost of borrowing increases, leading to a decrease in the amount of loanable funds demanded. On the other hand, when the rate of interest decreases, the cost of borrowing decreases, leading to an increase in the amount of loanable funds demanded. Therefore, the two variables have an inverse relationship.

There Is a _____ Relationship Between the Amount of Loanable