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Explain How Each of the Following Events Would Affect the Supply

question 138

Essay

Explain how each of the following events would 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 people's wealth is higher.
c. The future looks a bit more grim, so expected future income is lower.
d. The real interest rate increases.


Definitions:

Reconsolidation

The process by which previously consolidated memories are recalled and actively consolidated again, potentially leading to modifications.

Memory Trace

A theoretical construct representing the physical and potentially biochemical changes in the brain associated with a stored memory.

Synaptic Effectiveness

Synaptic effectiveness refers to the efficiency and strength with which a synapse can transmit a signal from one neuron to another.

Long-term Depression (LTD)

A reduction in the effectiveness of neuronal synapses lasting hours or longer following a long patterned stimulus, contributing to the inverse process of synaptic strengthening.

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