The demand for loanable funds curve shows that as the ________ interest rate increases, there will be ________ the curve.
A) nominal; a rightward shift in
B) real; a rightward shift in
C) nominal; movement down along
D) real; movement up along.

Question

Quizplus · Accepted Answer

The demand for loanable funds curve illustrates that as the real interest rate increases, there is a movement up along the curve, indicating a decrease in the quantity of loanable funds demanded. This is because higher real interest rates make borrowing more expensive, reducing the quantity of loans demanded.

The Demand for Loanable Funds Curve Shows That as the ________