An increase in the demand for borrowing will cause the equilibrium quantity of borrowing to:
A) increase.
B) decrease.
C) remain unchanged.
D) first increase and then decrease.

Question

Quizplus · Accepted Answer

An increase in demand for borrowing means that more people want to borrow, causing a shift in the demand curve to the right. This creates a new equilibrium point where both the quantity and price of borrowing are higher than before. Therefore, the equilibrium quantity of borrowing will increase.

An Increase in the Demand for Borrowing Will Cause the Equilibrium