If the demand curve for funds increased but the supply curve remained constant,we would expect to see the total amount of funds supplied and demanded increase and interest rates in general also increase.

Question

Quizplus · Accepted Answer

If the demand for funds increased while the supply remained constant, there would be a shortage of funds at the original interest rate. In order to balance the market, interest rates would need to increase to encourage more funds to be supplied. As a result, both the total amount of funds supplied and demanded would increase, along with interest rates.

If the Demand Curve for Funds Increased but the Supply