If individuals become more impatient, what will happen in the market for loanable funds? The supply of loanable funds will decrease, interest rates will fall, and the quantity of saving and borrowing will increase. The supply of loanable funds will decrease, interest rates will rise, and the quantity of saving and borrowing will decrease. The supply of loanable funds will increase, interest rates will rise, and the quantity of saving and borrowing will decrease. The supply of loanable funds will increase, interest rates will fall, and the quantity of saving and borrowing will increase.

Question

Giancarlo Rojas

Business

22 October, 22:26

If individuals become more impatient, what will happen in the market for loanable funds? The supply of loanable funds will decrease, interest rates will fall, and the quantity of saving and borrowing will increase. The supply of loanable funds will decrease, interest rates will rise, and the quantity of saving and borrowing will decrease. The supply of loanable funds will increase, interest rates will rise, and the quantity of saving and borrowing will decrease. The supply of loanable funds will increase, interest rates will fall, and the quantity of saving and borrowing will increase.

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Answers (1)

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Mason Stephenson · Answer 1

The supply of loanable funds will decrease, interest rates will rise, and the quantity of saving and borrowing will decrease.

Explanation:

If the people become more impatient then there will be less saving by them. So, there will be less money available with the people for providing loanable funds to the borrowers. Hence, as a result the supply of loanable funds decreases in the market for loanable funds. This will shift the supply curve of loanable funds leftwards and there is a rise in the interest rate.

It will be expensive for the borrower to take funds from the lenders at a higher interest rate, as a result they make less investment.