An increase in disposable income
A) has no effect on the supply of loanable funds curve.
B) shifts the supply of loanable funds curve rightward.
C) shifts the supply of loanable funds curve leftward.
D) results in movement up the supply of loanable funds curve.

Question

Quizplus · Accepted Answer

An increase in disposable income typically leads to more savings among consumers, as they have more income left after taxes and consumption. This increase in savings enhances the availability of loanable funds, shifting the supply curve of loanable funds to the right.

An Increase in Disposable Income