The demand for loanable funds increases when the expected rate of return increases.

Name: The demand for loanable funds increases when the expected rate of return increases.
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Question

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When the expected rate of return on an investment increases, the demand for loanable funds to make that investment also increases. This is because businesses and individuals are willing to borrow more money at a higher interest rate in order to make a potentially more profitable investment.

The Demand for Loanable Funds Increases When the Expected Rate