Explain and show graphically how an increase in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds
What will be an ideal response?
An increase in household saving increases the supply of loanable funds, shifting the supply curve for loanable funds to the right, as shown below. The increase in the supply of loanable funds results in a decrease in the equilibrium interest rate and an increase in the equilibrium quantity of loanable funds.
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The slope of the long-run aggregate supply curve is
A) positive. B) negative. C) zero. D) undefined.
What is bank insolvancy?
Demand deposits are included in
a. M1 but not M2. b. M2 but not M1. c. M1 and M2. d. neither M1 nor M2.
What determines the price and the quantity produced of most goods?
a. the consumer's perception of necessity b. the interaction of supply and demand c. the quality of the goods that are produced d. the availability of substitutes for the goods