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21 January, 22:59

If the supply of loanable funds decreases and the demand for loanable funds increases at the same time, interest rates will:

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  1. 21 January, 23:25
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    If the supply of loanable funds decreases and the demand for it increases at the same time, interest rates will increase. Interest rate is inversely proportional to the supply of money. Smaller money supplies raise market interest rates. A larger money supply lowers market interest rates.
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