Higher saving rate â†' loanable funds supply and equilibrium interest rate:

An increase in the saving rate does lead to a higher supply of loanable funds; however, the equilibrium interest rate would not increase. Instead, the increased supply results in a surplus of funds, driving interest rates down, not up. Therefore, this choice incorrectly assumes both variables move in the same direction.

This option incorrectly suggests that an increase in the saving rate would decrease the supply of loanable funds. In reality, a higher saving rate increases the available funds, which would not lead to an increase in interest rates; instead, it would likely decrease them due to increased supply.

This choice implies that changes in the saving rate have no impact on the loanable funds supply or the equilibrium interest rate, which contradicts fundamental economic principles. An increase in savings directly affects the supply of loanable funds and subsequently alters the equilibrium interest rate.