What will happen in an economy where the demand for loanable funds is greater than the supply? A. Investment spending will increase. B. Interest rates will increase. C. Real GDP will increase D. Price level will increase E. Consumer spending will increase
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This will lead to an increase in the interest rates, as lenders will be able to charge higher rates due to the high demand. Higher interest rates will discourage some borrowers from taking loans, which will reduce the demand for loanable funds. At the same time, Show more…
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