S Interest Rate i D Quantity of Loans Now suppose the demand for loans increases (e.g. more borrowing by the federal government, or state governments, or corporateions, or home buyers, or ...) [I suggest you move the dashed demand curve onto the graph to help you answer these questions.] a. the equilibrium interest rate will (highlight the correct answer)... i. increase ii. stay the same decrease. b. the equilibrium quantity of loans will (highlight the correct answer)... i. increase ii. stay the same decrease