Biology Forums - Study Force

The following table lists some economic agents and their intentions. At present the interest rate is 5 percent.

Who	Intent	Amount Needed
Mike	Save for child's college	$50,000
Sophie	Buy a car	$10,000
Pie's Pizza	Expand restaurant	$100,000
Sara	Save for retirement	$100,000

Refer to the table above. If there are no other people or companies in the market for loanable funds, which of the statements below must be TRUE?

▸ There is a shortage of savings, and for the market to clear the interest rate will increase.

▸ There is a shortage of investment, and for the market to clear the interest rate will decrease.

▸ There is a shortage of investment, and for the market to clear the interest rate will decrease.

▸ There is a shortage of savings, and for the market to clear the interest rate will decrease.

Content hidden