Asked by Jordan Tongen on Jul 16, 2024
Verified
Other things the same, a higher interest rate induces people to
A) save more, so the supply of loanable funds slopes upward.
B) save less, so the supply of loanable funds slopes downward.
C) invest more, so the supply of loanable funds slopes upward.
D) invest less, so the supply of loanable funds slopes downward.
Loanable Funds
A term in economics referring to the market where savers supply funds for loans to borrowers, influenced by interest rates.
Induces
Induces means to lead or move someone to take action, often by persuasion or influence.
- Study the impact that variations in interest rates have on the supply and demand of funds for lending.
Verified Answer
TN
Trinh Nguy?nJul 22, 2024
Final Answer :
A
Explanation :
A higher interest rate makes saving more attractive, leading to an increase in the supply of loanable funds, which is represented by an upward-sloping supply curve.
Learning Objectives
- Study the impact that variations in interest rates have on the supply and demand of funds for lending.