Suppose the interest rate increases.Other things constant, how will the loanable funds market be affected?
A) The supply of loanable funds curve will shift to the left.
B) The supply of loanable funds curve will shift to the right.
C) The quantity of loanable funds supplied will increase.
D) The quantity of loanable funds demanded will increase.

Question

Suppose the interest rate increases.Other things constant, how will the loanable funds market be affected?  
A) The supply of loanable funds curve will shift to the left. 
B) The supply of loanable funds curve will shift to the right. 
C) The quantity of loanable funds supplied will increase. 
D) The quantity of loanable funds demanded will increase.

Quizplus · Accepted Answer

An increase in the interest rate makes saving more attractive, leading to an increase in the quantity of loanable funds supplied, as savers are more willing to lend their money at higher rates.

Suppose the Interest Rate Increases