Using the three-panel diagram, illustrate what happens in the USeconomy if consumers save more money than they otherwise wouldhave. This will shift curve (b)?the supply curve in the market forloanable funds. What happens to the interest rate? The amount offunds loaned? Net Capital Outflow? Net Exports? The real exchangerate?

ir (a) Qlot loorable NCO funds) Q( of dollars)

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XU Qlot lovable funds) (6) (c) er NLD Q(of dollars) XU Qlot lovable funds) (6) (c) er NLD Q(of dollars)

Answer rating: 100% (QA)

ANSWER Higher domestic private saving will shift supply curve rightward to b1 As a result ... View the full answer