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

Question

Quizplus · Accepted Answer

An increase in the demand for borrowing typically leads to higher interest rates, which incentivizes more people to save, thus increasing the equilibrium quantity of saving.

An Increase in the Demand for Borrowing Will Cause the Equilibrium