In the loanable funds market, when there is a decrease in investor sentiment, the demand for loans typically __________, leading to a change in equilibrium interest rates.

In the loanable funds market, when investor sentiment decreases, people and businesses become more cautious about borrowing money. This means that the demand for loans typically goes down because investors are less willing to take risks. As a result, fewer people want to borrow funds, which can lead to lower interest rates. For example, if a company decides not to expand its operations due to uncertainty, it won't seek a loan, causing a decrease in demand in the market. Consequently, with less demand for loans, the equilibrium interest rates tend to fall as lenders compete to attract borrowers.