-In the above figure, the economy is at point a on the initial supply of loanable funds curve SLF?. What happens if the real interest rate rises?

Question

Quizplus · Accepted Answer

A rise in the real interest rate would not shift the supply curve of loanable funds but would result in a movement along the supply curve to a higher interest rate and greater quantity of loanable funds supplied, represented by a movement to a point like b.

-In the Above Figure, the Economy Is at Point a on the Initial