Question

When the supply of loanable funds shifts its position to the right, interest rates will ________...

When the supply of loanable funds shifts its position to the right, interest rates will ________ because loanable funds will be ________.

-rise;more scarce

-rise;less scarce

-fall;less scarce

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Answer #1

Answer

Option 3

-fall;less scarce

the shifts to the right mean the loanable fund supply curve shifts to the right which decreases the interest rate and increases the quantity in the new equilibrium as the loanable funds will be less scarce.

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