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AP® Macroeconomics

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Moderate

Loanable Funds (Savings)

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If Americans decide to save more money, we would expect

A

the demand for loanable funds to shift to the right and the real interest rate to rise.

B

the supply of loanable funds to shift to the left and the real interest rate to rise.

C

the demand for loanable funds to shift to the left and the real interest rate to fall.

D

the supply of loanable funds to shift to the right and the real interest rate to fall.

E

crowding out occurs as a result of this increase in the budget deficit.