If demand for loanable funds decreases, what will happen to real interest rates and the economic growth?

Real Interest Rates / Economic Growth

Increase / Increase

Increase / Decrease

Decrease / No Change

Decrease / Decrease

Decrease / Increase

If private investors become less optimistic about the economy, we can expect that

demand for loanable funds will increase.

supply of loanable funds will increase.

demand for loanable funds will decrease.

supply of loanable funds will increase and demand for loanable funds will increase.

loanable funds will not be impacted by this action.

The demand curve for loanable funds is downward sloping because

there are more potential investment projects that yield 10% than there are investment projects that yield 7%.

when the interest rate is low, the quantity demanded of loanable funds will be less.

when the interest rate is low, the quantity demanded of loanable funds will be greater.

when the interest rate is high, the quantity supplied of loanable funds will be less.

when the interest rate is high, the quantity demanded of loanable funds will be greater.

As a result of a recession, citizens all over the nation are withdrawing their savings. As a result of this action, there will be

an increase in the supply of loanable funds.

an increase in the quantity supplied of loanable funds.

a decrease in the supply of loanable funds.

a decrease in the demand for loanable funds.

an increase in the demand for loanable funds.

Suppose investors believe the economy will grow in the future. Which of the following best describes the impact of this belief on demand for loanable funds and interest rates?

Loanable Funds / Interest ratesIncrease / Increase

Increase / Decrease

No change / Increase

Decrease / Increase

Decrease / Decrease