The law of supply states that, ceteris paribus, if the price of loans (known as "interest rate") rises then the quantity supplied of loans will decrease.

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The law of supply states that, ceteris paribus, an increase in price leads to an increase in the quantity supplied. Therefore, if the interest rate rises, the quantity supplied of loans would typically increase, not decrease.

The Law of Supply States That, Ceteris Paribus, If the Price