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
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
Chapter15: Monetary Policy
Section: Chapter Questions
Problem 2WNG
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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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Keeping money in foreign financial institution will reduce the money available in domestic country.
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