how an increase in household saving affects the equilibrium interest rate and the equilibrium quantity of loanable funds

equilibrium interest rate would fall and equilibrium quantity of loanable funds will increase

Explanation:

When household savings increases, the supply of loanable funds will also increase. Then we will have the supply curve for loanable funds shifting to the right. So we now have more supply of loanable funds. This increase in the supply of loanable funds will then cause equilibrium interest rate to fall or let's say decrease. And then the equilibrium quantity of loanable funds will therefore increase.

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