Question $31(1\mathrm{.}25$ points$)$

Consider the market for loanable funds. Which of the following best describes why

the demand curve is downward sloping?

The higher the interest rate, the more likely households are to spend

The higher the interest rate, the less likely firms are to invest

The higher the interest rate, the more likely firms are to invest

The higher the interest rate, the more likely households are to save