Answer:
The correct answer is option c.
Explanation:
An increase in interest rate can be because of an increase in demand for loanable funds or decrease in the supply of loanable funds.
Suppose most businesses decide t modernize and install new equipment. For this, they need to invest more. This will cause an increase in the demand for loanable funds. This increase in demand for loanable funds will be represented by a rightward shift in the demand curve.
This rightward shift will cause the interest rate to increase.