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Other things the same, a decrease in the real interest rate a. shifts the demand for loanable funds to the left. b. shifts the demand for loanable funds to the right. c. decreases the quantity of loanable funds demanded. d. increases the quantity of loanable funds demand

User Eahiya
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Answer:

d. Increases the quantity of loanable funds demand

Step-by-step explanation:

A decrease in interest rates lowers the cost of borrowing, this means that people find it cheaper to borrow more money and thus they will demand more loanable funds. There is no shift in the demand curve as all other things are held constant and only cost of borrowing has been reduced thus the demand simply increases.

Furthermore people are less likely to keep savings as interest rates are low so they will instead borrow money to make any planned investments or payments.

Hope that helps.

User ChaosPredictor
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