If equilibrium interest rate decreases with respect to decrease in interest rate, then movement along supply of funds curve is
A. upside movement
B. downside movement
C. shift left
D. shift right
Answer: Option B
Solution (By Examveda Team)
If equilibrium interest rate decreases with respect to decrease in interest rate, then movement along supply of funds curve is downside movement. The equilibrium interest rate is the rate at which the quantity of money demanded is equal to the quantity of money supplied. The Federal Reserve can alter the equilibrium interest rate by adjusting the supply of money. The demand for money and supply of money can be graphed to determine the equilibrium interest rate.This Question Belongs to Management >> International Finance And Treasury
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