Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 26 - Part IX - Saving, Investment, and the Financial System - Quick Check Multiple Choice - Page 567: 4

Answer

b. Supply, down

Work Step by Step

If more Americans are convinced about the importance of saving for retirement, the Total Savings would increase. As the Savings are the source of supply of loanable funds, the supply curve of loanable funds in the market shifts. As the supply of loanable funds has increased in the markets without any change in the demand, the interest rate would go down in order to bring the market to equilibrium
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