An increase in the supply of loanable funds will decrease the rate of interest.

Name: An increase in the supply of loanable funds will decrease the rate of interest.
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Question

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When the supply of loanable funds increases, it means there is more money available for borrowing. This increase in supply, according to the law of supply and demand, leads to a decrease in the price of borrowing money, which is the interest rate.

An Increase in the Supply of Loanable Funds Will Decrease