If investors shift funds from stocks into bank deposits, this ____ the supply of loanable funds and places ____ pressure on interest rates.

Question

If investors shift funds from stocks into bank deposits, this ____ the supply of loanable funds and places ____ pressure on interest rates. ​

Quizplus · Accepted Answer

When investors move their money from stocks to bank deposits, the amount of money available for banks to lend out increases. This increase in the supply of loanable funds typically leads to a decrease in interest rates, as banks have more funds to lend and may reduce rates to attract borrowers.

If Investors Shift Funds from Stocks into Bank Deposits, This