Final answer:
A simultaneous increase in the demand for loanable funds and a decrease in the supply of loanable funds would definitely cause the equilibrium interest rate in the market for loanable funds to decrease. Therefore correct option is D
Step-by-step explanation:
The event that would definitely cause the equilibrium interest rate in the market for loanable funds to decrease is a simultaneous increase in the demand for loanable funds and a decrease in the supply of loanable funds.
When the demand for loanable funds increases, lenders can charge higher interest rates. However, if the supply of loanable funds decreases at the same time, there will be fewer lenders and more competition for borrowers, which will drive interest rates down.
For example, if the government implements policies that promote borrowing, such as reducing interest rates, while at the same time implementing policies that discourage saving and investing, such as increasing taxes on savings, it will result in an increase in the demand for loans and a decrease in the supply of loans, leading to a decrease in the equilibrium interest rate.