Final answer:
A rise in supply in the financial market will lead to a decline in interest rates.
Step-by-step explanation:
The correct answer is C. a rise in supply. When there is an increase in the supply of money in the financial market, lenders have more funds available to lend, leading to increased competition among lenders. As a result, interest rates tend to decrease.
For example, if the central bank decides to increase the money supply by purchasing government bonds in the open market, it injects more money into the system, which increases the supply of money available for borrowing. This increased supply of money leads to a decrease in interest rates.
On the other hand, a decrease in demand for loans or a decrease in the supply of money would result in higher interest rates.