A decrease in public saving has what impact on the market for loanable funds?
A)The supply of loanable funds increases.
B)The demand for loanable funds increases.
C)The supply of loanable funds decreases.
D)The demand for loanable funds decreases.

Question

Quizplus · Accepted Answer

Public saving represents the amount of money that households, businesses, and governments save and invest. A decrease in public saving means that there is less money available for investment. This means that the supply of loanable funds decreases, as there is less money to lend out to borrowers. This decrease in the supply of loanable funds can lead to an increase in the interest rates, making borrowing more expensive.

A Decrease in Public Saving Has What Impact on the Market