At an 8 percent interest rate, the quantity of savings is $250 billion. What would the quantity of savings be if the interest rate falls to 5 percent?

Question

Quizplus · Accepted Answer

A decrease in interest rates typically leads to a decrease in the quantity of savings, as the incentive to save is reduced. Therefore, the quantity of savings would likely decrease from $250 billion to $190 billion.

At an 8 Percent Interest Rate, the Quantity of Savings