What is the likely effect on Pakistan's loanable funds market if its citizens increase their savings?

Stocks MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

PPSCFPSCNTSPakistan govt jobs
Subject
Stockseconomics-mcqs › stocks
Published
30 May 2019
Last updated
28 May 2026

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Explanation

When citizens save more, the supply of loanable funds increases, shifting the supply curve to the right. This greater availability of funds causes the real interest rate to decline as lenders compete to provide loans.

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