An increase in the real interest rate
A) has no effect on the loanable funds.
B) increases the quantity of loanable funds supplied.
C) increases current consumption.
D) decreases the quantity of loanable funds supplied.
E) shifts the supply of loanable funds curve rightward.

Question

Quizplus · Accepted Answer

An increase in the real interest rate incentivizes savers to supply more loanable funds, as they receive a higher return on their savings.

An Increase in the Real Interest Rate