In the loanable funds theory the demand for loanable funds in the business sector falls as interest rates increase.

Name: In the loanable funds theory the demand for loanable funds in the business sector falls as interest rates increase.
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In the loanable funds theory, the demand for loanable funds by businesses decreases as interest rates increase because higher interest rates make borrowing more expensive, thus reducing the incentive for businesses to take out loans for investment purposes.

In the Loanable Funds Theory the Demand for Loanable Funds