Arrange the following steps in the correct order of how the loanable funds market reacts to a deterioration in investor sentiment: A) Decrease in demand for loans, B) Decrease in equilibrium interest rates, C) Shift left in the demand curve, D) Overall reduction in economic activity.

When investor sentiment worsens, people become less confident about the economy and are less likely to borrow money for investments. This leads to a decrease in demand for loans, which is represented by a shift left in the demand curve. As demand for loans decreases, lenders may lower interest rates to attract more borrowers, resulting in a decrease in equilibrium interest rates. With fewer loans being taken out, there is an overall reduction in economic activity because businesses and individuals are not investing as much. For example, if a company decides not to take a loan to expand due to fear of an economic downturn, this could slow down hiring and spending in the economy.