Everything else remaining unchanged, what is likely to happen to the credit supply curve of households if:

a. there is a decrease in the real interest rate?
b. households expect a recession in near future?

What will be an ideal response?

a. Everything else remaining unchanged, if there is a decrease in the real interest rate, there will be a downward movement along the credit supply curve of households.
b. Everything else remaining unchanged, if households expect a recession in near future, they will tend to save more today. This will cause the credit supply curve of households to shift to the right.

Economics

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According to the production possibilities model, if more resources are allocated to the production of physical and human capital, then which of the following is likely to happen?

A) The country's total production will fall. B) The production possibilities frontier will shift inward in the future. C) Fewer goods will be produced for consumption today. D) Future economic growth will decline.

Economics

If an increase in the price of Good A causes an increase in the demand for Good B, Goods A and B are said to be substitutes

a. True b. False Indicate whether the statement is true or false

Economics