There will be pressure on the interest rate for loanable funds to increase when:
| a. |
Demand decreases |
|
| b. |
Quantity demanded exceeds the quantity supplied |
|
| c. |
Supply increases |
|
| d. |
Quantity supplied exceeds quantity demanded |
Answer
Option b
Quantity demanded exceeds the quantity supplied
the market is in the shortage, so the shortage pressures on the interest rate to increase up to the equilibrium level where quantity supplied is equal to quantity demanded.
There will be pressure on the interest rate for loanable funds to increase when: a. Demand...