In September 2024
Answer to Question #92384 in Macroeconomics for Ashleigh
a) The economy is in a recession so people's disposable income is lower.
b) The stock market is booming so the people's wealth is higher.
c) Fewer college graduates are finding jobs so expected future income is lower.
d) The real interest rate increases.
a) Disposable income is lower, so saving is decreased. The supply of loanable funds
curve shifts leftward.
b) People are wealthier, so they save less. The supply of loanable funds curve shifts leftward.
c) Expected future income is lower, so people save more. The supply of loanable funds curve
shifts rightward.
d) The quantity of saving increases. There is an upward movement along the supply of loanable
funds curve but no shift in the curve.
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#340153 on Dec 2023
Comments
Dear Ashleigh Klaver, Poor people are the one who save money to become wealthy. The wealthy people have enough money and do not need to save it so they save less. Since there is less supply of loanable funds, the curve therefore shifts to the left.
Thank you.. I do wonder how with Question B the savings will decrease I would of thought the savings will increase with the wealthier the consumer gets. Which would've thought the curve would shift to the right instead of the left.
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