FIGURE 15-2
-Refer to Figure 15-2.The market for financial capital is initially in equilibrium at point E₁.A shift of the aggregate saving supply curve from S₁ to S₂,all other things being equal,would

Question

FIGURE 15-2 -Refer to Figure 15-2.The market for financial capital is initially in equilibrium at point E<sub>1</sub>.A shift of the aggregate saving supply curve from S<sub>1</sub> to S<sub>2</sub>,all other things being equal,would A) shift the investment demand curve to I<sub>2</sub>. B) change the technology of capital use. C) decrease the equilibrium interest rate. D) increase the equilibrium interest rate. E) reduce the marginal product of capital.

Quizplus · Accepted Answer

A shift from S1 to S2 indicates an increase in savings supply, which typically leads to a decrease in the equilibrium interest rate, assuming demand remains constant.

FIGURE 15-2 -Refer to Figure 15-2.The Market for Financial Capital Is Initially