An increase in disposable income will INCREASE the supply of loan-able funds and the the adoption of new technology will INCREASE the demand for loan-able funds. The equilibrium real interest rate INCREASES AND THE QUANTITY OF LOAN-ABLE FUND INCREASES. The higher the disposable income, the higher the funds available for lending. Borrowing of funds increases when new technology are adopted and this leads to increase in the interest rate and in the amount of money banks are ready to lend out.
