If the supply of loanable funds increases and the demand for loanable funds decreases 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

When the supply of loanable funds increases, it means that lenders have more funds available to lend. On the other hand, if the demand for loanable funds decreases, borrowers require less money to invest or spend. The excess supply of loanable funds relative to demand will lead to a decrease in interest rates. Therefore, if the supply of loanable funds increases and the demand for loanable funds decreases at the same time, interest rates will decrease.

If the Supply of Loanable Funds Increases and the Demand