Suppose the government implements a policy reducing the rewards earned by savers. In this case, the _____ loanable funds shifts _____.
A) supply of; left
B) supply of; right
C) demand for; left
D) demand for; right

Question

Quizplus · Accepted Answer

If the rewards earned by savers are reduced, they will be less likely to save, causing a decrease in the supply of loanable funds. This would shift the supply of loanable funds curve to the left.

Suppose the Government Implements a Policy Reducing the Rewards Earned