les In our Loanable Funds Market analysis, a decrease in the Demand for Loanable

Question

les In our Loanable Funds Market analysis, a decrease in the Demand for Loanable Funds (remember, that is depicted as a leftward shift) means O that equilibrium interest rate will fall. O that people are willing to save less than before at any given interest rate. O none of the other options. O that equilibrium interest rate will rise. O that borrowers are willing to borrow more than before at any given interest rate. Question 21 2.5 pt According to how we model the Loanable Funds market in Ch. 6 (taking (T - G) as government's net 'saving'; which could be negative it there were a deficit), which of the following shifts the Supply of Loanable Funds curve to the left? O lower budget deficit O lower tax rates on business investment spending a change in tastes toward saving more change in tastes toward consuming less higher budget deficit

Explanation / Answer

1) option is a. Because we can consider interest rate as price. As demand falls given a supply the price falls si is the interest rate will fall with decrease in demand for loanable funds.

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