When expansionary fiscal policy is implemented and the government increases its borrowing, it is true that this will always lead to a decrease in the availability of loanable funds and an increase in interest rates, regardless of other economic factors.

When the government uses expansionary fiscal policy, it borrows more money to spend on things like infrastructure or social programs. This increased borrowing can reduce the amount of money available for others to borrow, which is known as the loanable funds market. As a result, when more people or businesses want to borrow money, the competition for those funds increases, leading to higher interest rates. However, this is not always guaranteed to happen, as other factors like overall economic conditions or the central bank's actions can influence interest rates too. For example, if the economy is weak and banks have excess funds, they might keep interest rates low even if the government is borrowing more.