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Melissa Chapman
on Nov 16, 2024

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Which of the following could explain an increase in the equilibrium interest rate and a decrease in the equilibrium quantity of loanable funds?

A) The demand for loanable funds shifted to the right.
B) The demand for loanable funds shifted to the left.
C) The supply of loanable funds shifted to the right.
D) The supply of loanable funds shifted to the left.

Equilibrium Interest Rate

The interest rate at which the quantity of money demanded equals the quantity of money supplied, stabilizing the economy.

Loanable Funds

Refers to all the money available for borrowing in a nation's economy, which comes from savings and is used for loans and investments.

Shifted

Shifted refers to the change in position, direction, or tendency of an object, market demand/supply curve, or another measurable factor.

  • Analyze the motivations and effects of transitions in the supply and demand curves for loanable funds.
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Estefania GomezNov 23, 2024
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