Following the financial crisis of 2008-09,the private demand for loanable funds decreased and,at the same time,U.S.central banks supplied a large quantity of funds.This resulted in

Question

Quizplus · Accepted Answer

When the private demand for loanable funds decreases and the supply of funds increases, the equilibrium real interest rate decreases. This is due to the fact that there are more funds available in the market than there are borrowers to take them, leading to increased competition among lenders and a decrease in interest rates. Therefore, the correct option is A) the equilibrium real interest rate decreasing.

Following the Financial Crisis of 2008-09,the Private Demand for Loanable