A decrease in the interest rate,other things constant,will:
A)shift the demand for loanable funds curve to the right.
B)shift the demand for loanable funds curve to the left.
C)increase the quantity of loanable funds demanded.
D)increase the quantity of loanable funds supplied.
E)shift the supply of loanable funds curve to the right.

Question

Quizplus · Accepted Answer

A decrease in interest rate will lead to a lower cost of borrowing, making it more attractive for consumers and businesses to take out loans to finance investments and purchases. This will increase the quantity of loanable funds demanded as individuals and firms will want to obtain more funds at the lower interest rate.

A Decrease in the Interest Rate,other Things Constant,will