If risk of financial security decreases and supply curve shifts to right and downwards then impact on equilibrium of interest rate must

Solution (By Examveda Team)

If risk of financial security decreases and supply curve shifts to right and downwards then impact on equilibrium of interest rate must decreases. 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.