Scenario 3: Unemployment decreases throughout the country causing a dramatic increase in income for millions of Americans. Causing Americans to save more. 1. What is the likely effect of this increase in income on the supply of loanable funds? The supply increases 2. What effect will this change have on the interest rate? It will decrease the interest rate. 3. How will this change the behavior of consumers? There will be more consumers for saving more.

Scenario 3: Unemployment decreases throughout the country causing a dramatic increase in income for millions of Americans. Causing Americans to save more. 1. What is the likely effect of this increase in income on the supply of loanable funds? The supply increases 2. What effect will this change have on the interest rate? It will decrease the interest rate. 3. How will this change the behavior of consumers? There will be more consumers for saving more.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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