If the interest rate increases,then:
A) the quantity saved will decrease but the quantity supplied of loanable funds will increase.
B) the quantity saved will increase but the quantity supplied of loanable funds will decrease.
C) both the quantity saved and the quantity supplied of loanable funds will decrease.
D) both the quantity saved and the quantity supplied of loanable funds will increase.

Question

Quizplus · Accepted Answer

When interest rates increase, saving becomes more attractive, leading to an increase in the quantity saved. Additionally, higher interest rates incentivize lenders to supply more loanable funds, thus increasing the quantity supplied of loanable funds.

If the Interest Rate Increases,then