Interest rates will move from one equilibrium level to another if an anticipated change occurs that causes the demand for loanable funds to change.

Question

Quizplus · Accepted Answer

This statement is true. The demand for loanable funds can be influenced by a variety of factors such as changes in the overall level of economic activity, government policy, and global events. When an anticipated change occurs that affects the demand for loanable funds, interest rates will adjust to a new equilibrium level that balances the supply and demand for funds.

Interest Rates Will Move from One Equilibrium Level to Another