If the equilibrium interest rate increases with respect to increase in interest rate, then the movement along the supply of funds curve show a/an __________?
Correct answer: C. upside movement
- A. shift left
- B. shift right
- C. upside movement
- D. downside movement
Explanation
A rise in the interest rate causes movement along the existing supply-of-funds curve, not a shift of the curve. Because lenders supply more funds at higher rates, the movement is upward.
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