If the real interest rate falls, there is
A)a rightward shift of the supply curve of loanable funds and no shift in the demand for loanable funds curve.
B)a downward movement along the supply of loanable funds curve.
C)a leftward shift of the supply of loanable funds curve and a rightward shift in the demand for loanable funds curve.
D)an upward movement along the supply of loanable funds curve.
E)a leftward shift of the supply of loanable funds curve and no shift in the demand for loanable funds curve.

Question

Quizplus · Accepted Answer

A fall in the real interest rate causes a downward movement along the supply curve of loanable funds, as suppliers are less willing to lend at lower rates.

If the Real Interest Rate Falls, There Is