The demand and supply of loanable funds increase simultaneously.This would cause:

Question

Quizplus · Accepted Answer

The increase in both demand and supply of loanable funds will lead to an increase in the equilibrium quantity of loanable funds. However, the effect on the equilibrium interest rate would be uncertain as the increase in demand would tend to raise the interest rate while the increase in supply would tend to lower it. The net effect on the interest rate would depend on the relative magnitudes of the increase in demand and supply.

The Demand and Supply of Loanable Funds Increase Simultaneously