The interest rate is 5% in the market for loanable funds. Investors wish to borrow $100 million and savers wish to save $125 million at this interest rate. We would expect the interest rate to _, as there is a _ of loanable funds. fall; shortage rise; surplus rise; shortage fall; surplus

An interest rate is the percentage of principal charged by the lender for the use of its money or asset. Low interest rates stimulate buying, which stimulates the economy. Also, higher interest rates cause consumers and businesses to save their money rather than borrow.

From the question, we would expect the interest rate to fall as there is currently a surplus of loanable fund.

The interest rate is 5% in the market for loanable funds. Investors wish to borrow $100 million and savers wish to save $125 million at this interest rate. We would expect the interest rate to _____, as there is a _____ of loanable funds. fall; shortage rise; surplus rise; shortage fall; surplus

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The interest rate is 5% in the market for loanable funds. Investors wish to borrow $100 million and savers wish to save $125 million at this interest rate. We would expect the interest rate to _, as there is a _ of loanable funds. fall; shortage rise; surplus rise; shortage fall; surplus