A higher level of wealth causes the demand for loanable funds to increase and interest rates to fall.

Name: A higher level of wealth causes the demand for loanable funds to increase and interest rates to fall.
Brand: Quizplus
Rating: 4.8 (35 reviews)

Question

Quizplus · Accepted Answer

According to the theory of loanable funds, an increase in wealth would lead to an increase in savings and supply of loanable funds. This increase in supply would lower interest rates, not increase demand for loanable funds.

A Higher Level of Wealth Causes the Demand for Loanable