An increase in the supply of saving curve will cause the equilibrium quantity of borrowing to:
A) increase.
B) decrease.
C) remain unchanged.
D) first increase and then decrease.

Question

Quizplus · Accepted Answer

An increase in the supply of saving curve will decrease the interest rate, making borrowing cheaper. As a result, the quantity of borrowing demanded will increase, leading to an increase in equilibrium quantity of borrowing.

An Increase in the Supply of Saving Curve Will Cause