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The equilibrium nominal rate of interest as determined in the loanable funds theory of interest could increase, decrease, or stay the same if: Both the
The equilibrium nominal rate of interest as determined in the loanable funds theory of interest could increase, decrease, or stay the same if: Both the supply and demand of loanable funds decrease. Expected inflation and the demand for loanable funds both decrease. The demand for loanable funds declines while the supply of loanable funds increases. Expected inflation increases and the supply of loanable funds decreases
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