If consumers elect to postpone consumption so they can have a more enjoyable future, the supply of loanable funds would increase and the market rate of interest would fall.

Question

Quizplus · Accepted Answer

When consumers postpone consumption, they are saving and contributing to the supply of loanable funds. This increase in supply would lead to a decrease in the market rate of interest due to the surplus of funds available for borrowing.

If Consumers Elect to Postpone Consumption So They Can Have