The real interest rate has a positive relationship with the supply of loanable funds.

Name: The real interest rate has a positive relationship with the supply of loanable funds.
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Question

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The real interest rate represents the return on savings or the cost of borrowing. When real interest rates are higher, saving becomes more attractive, leading to an increase in the supply of loanable funds as individuals are more inclined to save rather than spend.

The Real Interest Rate Has a Positive Relationship with the Supply