Other things remaining the same, the ________ the real interest rate, the ________.
A) lower; greater the quantity of loanable funds demanded
B) lower; greater the demand for loanable funds
C) higher; greater the quantity of loanable funds demanded
D) higher; greater the demand for loanable funds
E) lower; greater the quantity of loanable funds supplied

Question

Quizplus · Accepted Answer

A lower real interest rate reduces the cost of borrowing, which increases the quantity of loanable funds demanded.

Other Things Remaining the Same, the ________ the Real Interest