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Demographics may contribute to the lower real interest rates because there is now a higher proportion...

Demographics may contribute to the lower real interest rates because

there is now a higher proportion of older people in the population and older people tend to save more

there is now a lower proportion of older people in the population and older people tend to save less

there is now a higher proportion of younger people in the population and younger people tend to save more

there is now a higher proportion of younger people in the population and older people tend to save less
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Interest rates can be reduced by two ways, one when the number of young people in the demography increases and other when the number of old people in the demographic decreases. when there are more young people in the economy they are expected to save more and due to this reason the supply of funds increases in the loanable funds market and this decreases the rate of interest for a given demand function. Similarly when there are fewer older people in the economy who are going to save less , again the supply will increase and the rate of interest will decrease

Select there is now a higher proportion of younger people in the population and younger people tend to save more

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