If the interest rate is below equilibrium,then the quantity of interest-bearing financial assets demanded is less than the quantity supplied,so people selling interest-bearing financial assets have to offer higher interest rates to get people to buy them,thus raising interest rates back to the equilibrium level.

Question

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According to the laws of supply and demand, if the quantity demanded is less than the quantity supplied, the price (in this case, the interest rate) will decrease until equilibrium is reached. Therefore, if the interest rate is below equilibrium, the quantity demanded is less than the quantity supplied, and sellers must offer higher interest rates to attract buyers and return to the equilibrium level.

If the Interest Rate Is Below Equilibrium,then the Quantity of Interest-Bearing