Virginia Real Estate Exam Practice Question
When banks have plenty of funds available for lending, what tends to happen to interest rates?
Correct Answer: A
Rationale: When banks have ample funds for lending, they often lower interest rates to attract borrowers, leading to option A. This increase in available capital creates competition among banks, driving rates down.
Option B suggests rates fluctuate, but with excess funds, a downward trend is more likely than random fluctuations.
Option C is incorrect; increased funds typically do not lead to higher rates, as banks aim to lend more.
Option D implies stability; however, an abundance of funds usually prompts a decrease in rates rather than maintaining them. Thus, the logical outcome is a decrease in interest rates.
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