The introduction of a new technology that raises the marginal product of new capital will:
A)decrease real interest rates and increase the equilibrium quantity of saving supplied and demanded.
B)decrease real interest rates and the equilibrium quantity of saving supplied and demanded.
C)increase real interest rates and the equilibrium quantity of saving supplied and demanded.
D)increase real interest rates and decrease the equilibrium quantity of saving supplied and demanded.

Question

Quizplus · Accepted Answer

The introduction of a new technology that raises productivity will shift the demand curve for loanable funds to the right. This increases real interest rates and the quantity of national savings and investment.

The Introduction of a New Technology That Raises the Marginal