Asked by
Kamren Kiefer
on Nov 26, 2024
Verified
A decrease in the supply of loanable funds and an increase in the demand for loanable funds will
A) increase the interest rate and the quantity of funds loaned.
B) decrease the interest rate and the quantity of funds loaned.
C) increase the interest rate, but the quantity of funds loaned may either increase or decrease.
D) decrease the interest rate, but the quantity of funds loaned may either increase or decrease.
Loanable Funds
The money available for borrowing and lending in the financial markets, determined by savings and investments.
Interest Rate
The percentage of a borrowed sum that the lender charges as interest to the borrower, usually specified as an annual percentage of the total loan amount.
- Ascertain the reasons behind movements in the supply and demand of loanable funds.
- Evaluate how alterations in interest rates affect behaviors related to borrowing and saving.
Verified Answer
SO
Learning Objectives
- Ascertain the reasons behind movements in the supply and demand of loanable funds.
- Evaluate how alterations in interest rates affect behaviors related to borrowing and saving.