If disposable income increases, people will decide to ________ saving, the supply of loanable funds will ________ and the real interest rate will ________.

Question

Quizplus · Accepted Answer

When disposable income increases, people have more money available to save, which increases the supply of loanable funds. As the supply of loanable funds increases, the real interest rate tends to fall due to the inverse relationship between the supply of funds and the interest rate.

If Disposable Income Increases, People Will Decide to ________ Saving