If the supply of loanable funds decreases and the demand for loanable funds decreases at the same time,interest rates will:

Question

Quizplus · Accepted Answer

When both supply and demand for loanable funds decrease simultaneously, the effect on interest rates is indeterminate without knowing the relative magnitudes of the changes in supply and demand. Interest rates could increase, decrease, or remain the same depending on which effect is stronger.

If the Supply of Loanable Funds Decreases and the Demand