Question

Which of the following is one of the reasons that the supply curve for loanable funds is upward sloping? A lower real interest rate makes saving less appealing. A higher real interest rate makes borrowing less expensive. A lower real interest rate encourages domestic consumers to purchase foreign securities and discourages foreigners from purchasing domestic securities. A lower interest rate makes borrowing less expensive

Answer 1

A lower real interest rate makes saving less appealing.

Step-by-step explanation:

The lower the interest rate, the lower the amount saved and the higher the interest rate, the higher the amount of money saved. There is a positive relationship between interest rate and the supply of loanable funds. This is why the supply curve for loanable funds is upward sloping