If interest rates rise,holding all else constant,this would cause a(n):

Question

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When interest rates rise, holding all else constant, the cost of borrowing increases. This creates a disincentive for borrowers to demand loans, which decreases the quantity of loanable funds demanded. On the other hand, savers are more inclined to supply funds at higher interest rates because their savings earn more return. This leads to an increase in the quantity supplied of loanable funds. Hence, there is an increase in the quantity supplied of loanable funds but a decrease in the quantity demanded of loanable funds.

If Interest Rates Rise,holding All Else Constant,this Would Cause A(n)