Ask Question
BusinessBusiness
17 September, 11:56

If the interest rate rises, the A. quantity of loanable funds demanded by firms decreases B. quantity of loanable funds demanded by government decreases C. quantity of loanable funds demanded by firms increases D. quantity of loanable funds demanded by government increases E. demand for loanable funds curve shifts to the right

+2
Answers (1)
  1. 17 September, 13:59
    0
    A. quantity of loanable funds demanded by firms decreases

    Explanation:

    Market for loanable funds represents a place of interaction between borrowers and lenders.

    Quantity of loanable funds demanded represents need for the borrowers to avail funds.

    Supply of loanable funds depends upon savings represented by the money banked by individuals. If consumption would be more, savings would be less and thus, supply of loananble funds will be less. This would raise the interest rate on loanable funds which would lead to a decrease in the quantity demanded of loanable funds by the firms.

    Similarly, when the supply of loanable funds increases, this reduces the interest rate, loans get cheaper and it becomes more convenient to avail loans and thus, quantity demanded of loanable funds by firms increase.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “If the interest rate rises, the A. quantity of loanable funds demanded by firms decreases B. quantity of loanable funds demanded by ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Mork and Mindy firm's current ratio is 2.5. Considered alone, which of the following actions would reduce the company's current ratio? Borrow using short-term notes payable and use the proceeds to reduce accruals.
Answers (1)
What is the total compound interest of a loan for $5000 with an annual interest rate of 8% at the end of a two-year period?
Answers (1)
Why was the electricity generated by the TVA cheaper than that generated by private power companies? A. Workers for the TVA did not receive payment like private workers did. B. The TVA operated mostly at a loss instead of trying to make a profit. C.
Answers (2)
A company had a profit of $350,000 in its first year. Since then, the company's profit has decreased by 12% per year.
Answers (1)
A couple sold an investment property for a realized gain of $58,000. Do they have to report this to the IRS and if so, on what form?
Answers (2)
New Questions in Business
What would you call a object that makes people shut up
Answers (1)
How do you present your educational qualifications in a resume?
Answers (1)
Most contracts are discharged by fulfilling conditions precedent
Answers (1)
River Falls Manufacturing uses a normal cost system and had the following data available for 2018: Direct materials purchased on account $148,000 Direct materials requisitioned 88,000 Direct labor cost incurred 127,000 Factory overhead incurred
Answers (1)
In the Reaching Beyond our Borders box titled, "Ethical Culture Clash", the story proves that a large multi-national company such as Motorola can ask its employees, and should expect them to follow the same ethical standards they would practice if
Answers (1)
Home » Business » If the interest rate rises, the A. quantity of loanable funds demanded by firms decreases B. quantity of loanable funds demanded by government decreases C. quantity of loanable funds demanded by firms increases D.
Sign Up Forgot Password?