A sudden increase in consumer confidence leads to a rise in borrowing for investment. How would this change affect the loanable funds market, and which category does this scenario best fit into?

When consumer confidence suddenly increases, people feel more optimistic about the economy and their financial future. This usually leads to more borrowing, as individuals and businesses want to invest in new projects or purchases. In the loanable funds market, this rise in borrowing increases the demand for loans, which can lead to higher interest rates, as lenders may charge more when they see more people wanting to borrow money. This scenario best fits into the category of "demand-side changes" in the loanable funds market, as it shows how increased demand for loans affects the overall market dynamics. For example, if a small business owner decides to borrow money to expand their shop because they believe more customers will come in, this reflects how consumer confidence can stimulate investment and change the market.