Other things equal, which of the following is the result of increased saving?
A)a decrease in interest rates
B)a decrease in prices
C)forgone consumption
D)all of the above

Question

Other things equal, which of the following is the result of increased saving?
A)​a decrease in interest rates
B)​a decrease in prices
C)​forgone consumption
D)​all of the above

Quizplus · Accepted Answer

Increased saving leads to forgone consumption, which can lead to a decrease in prices as demand for goods and services decreases. This decrease in demand can also lead to a decrease in interest rates, since there is less demand for borrowing. Therefore, all of the options listed (A, B, and C) are the result of increased saving.

Other Things Equal, Which of the Following Is the Result