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the If the interest rate in the loanable funds market is currently below the equilibrium level, then the quantity of funds de
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Answer #1

if the interest rate in the loanable funds market is currently below the equilibrium level, then the quantity of funds demanded is greater than the quantity of funds supplied, and we can expect the interest rate to increase over time

Interest rate below the equilibrium interest rate creates shortage of funds in loanable funds market (i.e., demand of loanable funds is higher than the supply of loanable funds). It will puts upward pressure on interest rate and increase the interest rate to the equilibrium point.

Answer: Option (B)

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