When private savings increase, it leads to a rightward shift in the supply curve of loanable funds, resulting in __________ real interest rates.

When private savings increase, people and businesses are putting more money into savings accounts, which makes more funds available for lending. This increase in available money causes the supply curve of loanable funds to shift to the right. As a result, there is more money available for banks and financial institutions to lend out, which can lead to lower competition for borrowing. Consequently, the real interest rates tend to decrease because lenders are willing to accept lower returns when there is a surplus of funds. For example, if a bank has a lot of savings deposits, it might lower the interest rate on loans to attract more borrowers, making it cheaper for people to take out loans.