Question

For the following scenario, determine how the supply/demand for loanable funds in the US shifts a....

  1. For the following scenario, determine how the supply/demand for loanable funds in the US shifts

a. Government delays the retirement age.

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Answer #1

Ans -a) The loanable funds market is affected by any change in spending or saving habits.

If the government delays the retirement age , it is most likely to increase the savings of the people because with delayed retirement age , people will retire late and their retirement savings will increase (under social security requirements) .

An increase in savings would increase the supply of loanable funds in the market . The supply curve would shift rightward (forward).

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