The law of supply states that, ceteris paribus, if the price of loans (known as the "interest rate")rises then the quantity supplied of loans will increase.

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According to the law of supply, if all other factors remain equal (ceteris paribus), an increase in the price of a good or service (in this case, the interest rate for loans) will lead to an increase in the quantity supplied. This principle applies to the market for loans, where higher interest rates incentivize lenders to supply more loans due to the higher potential returns.

The Law of Supply States That, Ceteris Paribus, If the Price