The law of supply states that, ceteris paribus, if the price of loans (known as "interest rate") rises then the quantity supplied of loans will increase.

True / false.

Answer: False

Law of supply can be referred to as a constitutional microeconomics principle which defines that, while keeping other terms constant, increase in price will have an outcome where there will be an increase in quantity supplied. In rudimentary terms, we scan state that there is a relationship between price of the commodity and quantity supplied.