Answer to Question #233095 in Macroeconomics for Olu

Question

All else equal , if savers decide to save less , the following is likely to occur in the market for loanable funds.

i.A fall in the equilibrium real interest rate
ii.An increase in the demand for loanable funds and reduction in the real interest rate
iii.An increase in the equilibrium quantity of loanable funds
iv.An indeterminate change in the quantity of loanable funds market

Answer 1

iv.An indeterminate change in the quantity of loanable funds market

Basis of the answer:

Any factor that impacts the savings behavior equally impacts the supply of loanable funds in the market for loanable funds.