Explain How Each of the Following Events Affect the Supply

question 74

Essay

Explain how each of the following events affect the supply of loanable funds curve:
a) The economy is in a recession so people's disposable income is lower.
b) The stock market is booming so the people's wealth is higher.
c) Fewer college graduates are finding jobs so expected future income is lower.
d) The real interest rate increases.

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Definitions:

Offline Brainstorming

A method of generating ideas by a group in a non-digital setting, typically through verbal or written communication.

Productivity

The efficiency at which individuals, companies, or economies produce goods or services, often measured as the amount of output per unit of input.

Sucker Effect

A phenomenon where individuals reduce their effort in group tasks to avoid feeling like they are being exploited or doing more work than others.

Free Riding

Free riding refers to the behavior of benefiting from the contributions of others in a group or community effort without contributing oneself.