Fill in the Blanks Module 29Online version Module 29 - The Loanable Funds Market - Fill-in-the-Blank (Part 2) by Zachary Foust 1 The equilibrium interest rate changes when there are of the demand curve for loanable funds or the supply curve for loanable funds . A change in beliefs about the rate of return on investment spending can increase or reduce the for loanable funds . Governments that run are major sources of the demand for loanable funds . An increase in the demand for loanable funds means the equilibrium interest rate . If the interest rate , businesses will cut back on their investment spending . The effect of government budget deficits on investment spending is called . A change in private savings behavior can shift the of loanable funds to the left or to the right . An increase in capital inflows can shift the of loanable funds to the right . An increase in the supply of loanable funds means the equilibrium interest rate . interest rate = interest rate - inflation rate The expectations of borrowers and lenders about future inflation rates are normally based on recent . An increase in the expected inflation rate drives up the interest rate by the same number of percentage points . In the short - run , the loanable funds market the lead of the money market .
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