As Interest Rates Rise, There Are Fewer Potential Investments That

question 144

Multiple Choice

As interest rates rise, there are fewer potential investments that will generate returns high enough to make the cost of paying back a loan worthwhile. This relationship is represented by the _______ in the market for loanable funds.

• A) upward-sloping supply curve
• B) downward-sloping supply curve
• C) upward-sloping demand curve
• D) downward-sloping demand curve