Asked by Darrious Gaines on Apr 28, 2024
Verified
If individuals decide to save more for retirement,
A) the supply of loanable funds will shift rightward.
B) the supply of loanable funds will shift leftward.
C) the demand for loanable funds will shift rightward.
D) the demand for loanable funds will shift leftward.
E) an excess supply of loanable funds emerges and persists.
Retirement Savings
Funds set aside during an individual's working years, intended to support them financially during retirement.
Loanable Funds
The market model where the supply of loans available from lenders meets the demand for loans from borrowers.
- Acquire knowledge of the variables influencing the movements in the supply and demand of funds available for lending and their effect on interest rates.
- Interpret the implications of debt management strategies on personal finance.
Verified Answer
KS
Kentrell Scruggs-TorranceMay 01, 2024
Final Answer :
A
Explanation :
When individuals save more, they are increasing the supply of loanable funds. This is because they have more money available to invest in financial markets. As a result, the supply of loanable funds shifts rightward, leading to a lower interest rate and potentially more investment and economic growth.
Learning Objectives
- Acquire knowledge of the variables influencing the movements in the supply and demand of funds available for lending and their effect on interest rates.
- Interpret the implications of debt management strategies on personal finance.