Holding other factors constant, if employers automatically enroll employees in retirement savings programs in order to overcome psychological barriers to saving, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A)increase; increase
B)increase; not change
C)increase; decrease
D)decrease; increase

Question

Quizplus · Accepted Answer

An increase in, or rightward shift of, the supply of savings will decrease real interest rates while the quantity of saving and investment will increase.

Holding Other Factors Constant, If Employers Automatically Enroll Employees in Retirement