If there is a shortage of loanable funds,then
A)the demand for loanable funds will shift right so the real interest rate rises.
B)the supply of loanable funds will shift left so the real interest rate falls.
C)there will be no shifts of the curves,but the real interest rate rises.
D)there will be no shifts of the curves,but the real interest rate falls.

Question

Quizplus · Accepted Answer

In a shortage of loanable funds, the quantity demanded exceeds the quantity supplied at the current interest rate, leading to an increase in the real interest rate to restore equilibrium without shifting the curves.

If There Is a Shortage of Loanable Funds,then