If the supply of loanable funds increases and the demand for loanable funds increases at the same time,interest rates will:
A) increase.
B) decrease.
C) remain the same.
D) increase,decrease,or remain the same.

Question

Quizplus · Accepted Answer

The increase in both the supply of loanable funds and the demand for loanable funds create opposite effects on interest rates. The increase in supply puts downward pressure on interest rates, while the increase in demand puts upward pressure on interest rates. Depending on the magnitude of each change, interest rates may increase, decrease, or remain the same. Therefore, the best choice is D.

If the Supply of Loanable Funds Increases and the Demand