If in the past Congress had taken additional actions to make saving more rewarding,then today it is likely that the equilibrium interest rate
A)and the equilibrium quantity of loanable funds both would be lower.
B)and the equilibrium quantity of loanable funds both would be higher.
C)would be higher and the equilibrium quantity of loanable funds would be lower.
D)would be lower and the equilibrium quantity of loanable funds would be higher.

Question

Quizplus · Accepted Answer

If Congress had taken additional actions to make saving more rewarding in the past, it would have increased the supply of loanable funds by encouraging more saving. This would have shifted the supply curve to the right, resulting in a lower equilibrium interest rate and a higher equilibrium quantity of loanable funds. Therefore, today, if Congress had taken such actions, the equilibrium interest rate would be lower and the equilibrium quantity of loanable funds would be higher.

If in the Past Congress Had Taken Additional Actions to Make