PPSCFPSCNTSPakistan govt jobs
- Subject
- Stockseconomics-mcqs › stocks
- Published
- 30 May 2019
- Last updated
- 28 May 2026
What is the likely effect on Pakistan's loanable funds market if its citizens increase their savings?
Multiple choice question for Stocks. Select an option, then review the explanation below.
Explanation
When citizens save more, the supply of loanable funds increases, shifting the supply curve to the right. This greater availability of funds causes the real interest rate to decline as lenders compete to provide loans.
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Practice related questions from the same subject.
- 1.What is the effect of an increase in the budget surplus on the market for loanable funds?
- 2.What happens to real interest rates and investment if Pakistani citizens become less future-oriented and reduce their savings at every real interest rate?
- 3.What effect does a rise in the budget deficit have on public savings?
- 4.What is the effect of a larger budget deficit on the real interest rate and the demand for loanable funds used for investment?
- 5.Which combination of government policies is most effective in promoting economic growth?