Final answer:
An increase in interest rates is good for lenders as they earn more on interest payments, but it's bad for borrowers since they have to pay more to borrow money. A fall in interest rates happens when demand for loans decreases and when there's increased competition among lenders. Conversely, an increase in the quantity of loans is driven by a larger number of people wanting to borrow and lend.
Step-by-step explanation:
When interest rates increase, the situation can generally be described as good for lenders but bad for borrowers. This is because lenders will receive higher interest payments, which is favorable for their earnings. On the other hand, for borrowers, it means that they will have to pay more in order to borrow money, which could hinder their ability to finance projects or make investments affordably.
If we consider market conditions where b and c factors are causing a fall in interest rates, this occurs because with lower demand for loans, lenders cannot charge as much, and more competition among lenders for borrowers pushes the rates down. Conversely, according to point 8, factors a and c that lead to an increase in the quantity of loans mean that with more people wanting to borrow and lend, the amount of loans given out will rise.