Explain and show graphically how a decrease in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds
What will be an ideal response?
A decrease in household saving decreases the supply of loanable funds, shifting the supply curve for loanable funds to the left, as shown below. The decrease in the supply of loanable funds results in an increase in the equilibrium interest rate and a decrease in the equilibrium quantity of loanable funds.
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If Evan has an absolute advantage in cleaning and bookkeeping when compared to Gloria, then
a. Evan must also have a comparative advantage in cleaning and bookkeeping b. Evan must have a comparative advantage in cleaning c. Evan must have a comparative advantage in bookkeeping d. Gloria has a comparative advantage in neither activity e. we can conclude nothing about comparative advantage
If indirect business taxes and depreciation were added to the national income, we obtain: a. Net National product
b. Gross National Product. c. Gross Domestic Product. d. Personal Income.