...Here are three indicators that show why financial strains are higher in Canada and one that shows why the country's vulnerability to a shock may actually be receding. Canada's household savings rate fell to 1.1 per cent in the first quarter. "That's about as low as it gets, historically," said Lascelles. It compares with 6.7 per cent in the U.S. The disparity between the two rates hasn't been this wide since the 1970s. The lower the savings rate, the less of a cushion households will have to weather tough economic times. "If there were to be a recession, whether it's in 2019 or 2029, or sometime in between, you can imagine Canadians getting hit a little harder than Americans," Lascelles said in a separate webcast. "They just have less room for error, less room to cushion any kind of hit with spending, before they would actually fall into outright dissavings.... - -Chris Fournier, Bloomberg News, June 10, 20191 Read the clip from the news article above. 1. Is the news clip talking about the quantity of loanable funds supplied or the supply of loanable funds? Explain your answer. 2. Explain why an increase in saving accompanied by a fall in interest rates is not contrary to what economic theory predicts.