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Single Answer MCQ
Q-00015838

If a bank lowers the interest rate on loans, what is likely to happen to the demand for loans?

1

Increase

2

Decrease

3

Remain the same

4

Become unpredictable

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Sandeep Chaturvedi

Sandeep Chaturvedi

CBSE Social Science & Humanities Reviewer

Social science and humanities educator with 14+ years of experience reviewing CBSE SST, economics, commerce, arts, and vocational content.

M.A. HistoryM.A. Political ScienceB.Ed.

Answer and Solution

Answer

A. Increase

Solution:

Lower interest rates reduce the cost of borrowing, typically leading to an increase in the demand for loans as it becomes more affordable for borrowers.

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