As the Real Interest Rate Decreases, the Quantity of Saving

question 66

Multiple Choice

As the real interest rate decreases, the quantity of saving supplied ________ and the quantity of saving demanded ________.

• A)increases; increases
• B)increases; decreases
• C)does not change; does not change
• D)decreases; increases

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Definitions:

Real Rate Of Interest

The rate of interest an investor expects to receive after allowing for inflation.

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment, indicating the health of an economy.

Labor Force

The aggregate sum of individuals working or in pursuit of work within a nation or area.

Discouraged Workers

Individuals not actively seeking employment because they believe no jobs are available for them.