All other things being equal,a decrease in the demand for loanable funds:
A) drives the interest rate up.
B) drives the interest rate down.
C) results from an increase in business circumstances and a decrease in the level of savings.
D) might not have any effect on the interest rate.

Question

Quizplus · Accepted Answer

When the demand for loanable funds decreases, it means that borrowers are less willing to borrow money. This will create a surplus of funds in the market, and lenders will lower their interest rates to attract borrowers. Therefore, the interest rate will go down.

All Other Things Being Equal,a Decrease in the Demand for Loanable