Question

It tomorrow's technology in a large open economy is expected to improve, loanable funds supply (or today) will ___; loanable funds demand (of today) will ___; equilibrium national savings (of today) will ___

Note: this is probably the most challenging question in the exam.
As a result, I assign 1/2 points for this problem.
In the meantime, I create Question 41 for 2.5 points and the answer to Question 41 is 3 ; and everybody should get the 2.5 points.
a. stay, increase, stay
b. stay, increase, increase
c. increase, stay, decrease
d. decrease, increase, stay

Answer 1

Expectation of improved technology in a large open economy typically leads to an increase in both the supply and demand for loanable funds, while equilibrium national savings remains stable.

Step-by-step explanation:

If tomorrow's technology in a large open economy is expected to improve, the supply of loanable funds today is likely to increase as people save more in anticipation of higher future returns on investments.

The demand for loanable funds today will increase because firms will want to borrow more to invest in new technologies.

The equilibrium national savings today will likely stay the same because the increase in supply is matched by an increase in demand; savings is the portion of the supply that is not immediately consumed.

When tomorrow's technology in a large open economy is expected to improve, the loanable funds supply (or today) will stay the same,

loanable funds demand (of today) will increase, and equilibrium national savings (of today) will stay the same.