If the risk of financial security increases and the supply curve shifts to the left then the impact on equilibrium of interest rate must ______________?
Correct answer: B. increases
- A. decreases
- B. increases
- C. positive
- D. negativeAccounting & Auditing
Explanation
Greater risk makes lenders less willing to supply funds, shifting the supply curve left. With demand unchanged, reduced supply raises the equilibrium interest rate.
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