Question

If in the past Congress had taken additional actions to make saving more rewarding, then today it is likely that the equilibrium interest rate a. and the equilibrium quantity of loanable funds both would be lower. b. and the equilibrium quantity of loanable funds both would be higher. c. would be higher and the equilibrium quantity of loanable funds would be lower.

Answer 1

Answer:

b. and the equilibrium quantity of loan-able funds both would be higher.

Explanation:

• If in the past congress had taken additional actions to make savings more rewarding, then today it is likely that the equilibrium interest rate would be lower and the quantity of loan-able funds would be higher.
• Savings are affected by interest rate reward in that, when the interest rate are more rewarding, then, there shall be more customers ready to save their money and vice versa.
• The quantity of loan-able funds shall go higher out of the increased willingness to save.