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If a popular TV show on personal finance convinces more Americans about the importance of saving for retirement, the ________ curve for loanable funds would shift, driving the equilibrium interest rate ________.

A. supply, up
B. supply, down
C. demand, up
D. demand, down

Respuesta :

zunesyed

Answer:

Supply, down

Explanation:

Interest rate is determined by the supply and demand curve. The point where supply and demand curve intersect, that is the equilibrium interest rate. More savings by the public increases the supply of loanable funds. Increase in supply will create a surplus of loanable funds which will push interest rate down to increase the demand of loans. In that regard, the interest rate usually goes up during a shortfall of loanable funds.

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