An increase in real interest rates will lead to an increase in the quantity of loanable funds supplied.

Name: An increase in real interest rates will lead to an increase in the quantity of loanable funds supplied.
Brand: Quizplus
Rating: 4.7 (35 reviews)

Question

Quizplus · Accepted Answer

When real interest rates increase, savers are incentivized to save more as they are earning a higher return on their investments. As a result, the supply of loanable funds (i.e., savings available for lending) increases, leading to a higher quantity of loanable funds supplied.

An Increase in Real Interest Rates Will Lead to an Increase