Suppose the French government imposes an interest rate ceiling on French bank deposits. What is the likely effect of this regulation?

Question

Quizplus · Accepted Answer

By imposing an interest rate ceiling on French bank deposits, the supply of loanable funds would decrease as banks have less incentive to gather deposits due to the limited interest they can offer. Consequently, this would reduce the total supply of funds available in the market, which would push upwards the Eurofranc interest rates.

Suppose the French Government Imposes an Interest Rate Ceiling on French