An increase 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)decrease the quantity of loanable funds supplied.
D)decrease the quantity of loanable funds demanded.
E)shift the supply of loanable funds curve to the right.

Question

Quizplus · Accepted Answer

An increase in the interest rate makes borrowing more expensive, which decreases the quantity of loanable funds demanded as borrowers are less willing or able to pay the higher interest.

An Increase in the Interest Rate,other Things Constant,will