If the demand for loanable funds shifts left,the equilibrium interest rate

Question

Quizplus · Accepted Answer

When the demand for loanable funds shifts left, it means there is less demand for borrowing money. As a result, lenders will be forced to lower interest rates in order to attract borrowers. A lower interest rate will lead to a decrease in the quantity of loanable funds supplied, which is why the equilibrium quantity will also fall. Therefore, the correct answer is (B) and quantity of loanable funds fall.

If the Demand for Loanable Funds Shifts Left,the Equilibrium Interest