Chicago economists think that leakage in the circular flow model does not exist. If this is the case, why does the government attempt to lower interest rates in order to encourage saving?

Imagine a scenario in which there is a decreased consumer confidence in domestic financial systems. As a result, consumers have increased their savings in foreign financial institutions. What is the likely result of the supply loanable funds market? A)The supply of loanable funds will increase B)The supply of loanable funds will decrease C) Demand for loanable funds will decrease

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