Question

The evidence on the supply curve of financial capital is controversial, but at least in the short run, the elasticity of savings with respect to the interest rate appears to be __________.

Answer 1

Options:

A. Elastic

B. Inelastic

C. Perfectly elastic

D. Negative

Answer: B. Inelastic

Explanation: A supply curve is a graphical representation of the Relationship between the supply of a product or service at different price levels.

Inelasticity is a term used in economics to describe a situation where the prices of goods and services don't have any effect on the demand or supply of goods and services.

IN THE SHORT RUN SAVINGS AND INTEREST RATE APPEAR TO BE INELASTIC IN A CONTROVERSIAL SUPPLY CURVE FOR FINANCIAL CAPITAL.