Which of the following is likely to happen if people suddenly become more willing to lend money?
A) An increase in the demand for loanable funds will increase the interest rate.
B) An increase in the supply of loanable funds will increase the interest rate.
C) An increase in the supply of loanable funds will decrease the interest rate.
D) An increase in the demand for loanable funds will decrease the interest rate.
E) A simultaneous increase in both the supply of and the demand for loanable funds will make it impossible to predict what will happen to the rate of interest.
Correct Answer:
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