What would result from an increase in the supply of national savings curve?
A)an increase in real interest rates
B)a decrease in real interest rates
C)a decrease in the dollar amount of savings
D)a decrease in the dollar amount of investment

Question

Quizplus · Accepted Answer

An increase in the supply of national savings would shift the national savings curve to the right, leading to a decrease in real interest rates. This is because an increase in savings leads to a lower demand for loans, causing lenders to decrease the interest rates they charge borrowers in order to entice them to borrow. Therefore, as the supply of savings increases, the cost of borrowing decreases, leading to a decrease in real interest rates. Choice A, C, and D are incorrect as they do not result from an increase in the supply of national savings curve.

What Would Result from an Increase in the Supply of National