A Decrease in the Interest Rate Due to an Increase

question 84

Multiple Choice

A decrease in the interest rate due to an increase in the supply of loanable funds is referred to as the __________ effect.

• A) expectations
• B) liquidity
• C) income
• D) a and c
• E) a,b and c

---

Definitions:

Supply Curve

Is a graphical representation showing the relationship between the price of a good or service and the quantity supplied.

Loanable Funds

The money available for borrowing, influenced by savings and investments, in financial markets.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid to the lender over a specified period.

Loanable Funds

Refers to the money available for borrowing. The market for loanable funds is where borrowers demand and lenders supply funds, determining the interest rate.