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If there is a shortage in loanable funds then: 
 
(i) the quantity demanded is greater than the quantity supplied and the interest rate will rise.
(ii) the quantity demanded is greater than the quantity supplied and the interest rate will fall.
(iii) the quantity supplied is greater than the quantity demanded and the interest rate will rise.
(iv) the quantity supplied is greater than the quantity demanded and the interest rate will fall.

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Reid Wolff
Reid WolffLv2
5 Mar 2020

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