If interest rates can provide an incentive not to spend money today, then, as interest rates fall:
A) there is a movement upward along the supply curve for loanable funds.
B) the supply curve for loanable funds shifts to the left.
C) there is a movement downward along the supply curve for loanable funds.
D) the supply curve for loanable funds shifts to the right.

Question

Quizplus · Accepted Answer

As interest rates fall, the incentive to save decreases, leading to a movement downward along the supply curve for loanable funds, as people are less inclined to save at lower interest rates.

If Interest Rates Can Provide an Incentive Not to Spend