Question

If a popular TV show on personal finance convinces more Americans about the importance of saving for retirement, the ________ curve for loanable funds would shift, driving the equilibrium interest rate ________.

Answer 1

Supply curve for loanable funds would shift, leading to a fall in the equilibrium interest rate.

Step-by-step explanation:

If the people are convinced that saving is important and start saving more, the supply of loanable funds will increase. As a result the supply curve will shift to the right. This shift in the supply curve will be accompanied with a decline in the equilibrium interest rate.

So, the correct answer is: supply; downwards.