Question

Automobile manufacturers are planning to adopt a new technology that will increase their overall productivity by 30%. As a result, the amount of equilibrium investment will ________________ and equilibrium interest rate will _________________ in the loanable funds market.

Answer 1

Increase; increase

Step-by-step explanation:

The automobile industry has identified a way to used technology to improve the overall productivity, which means, low manufacturing cost and more products. This will open a new way to boost the automobile industry. More companies and firms will start taking part in the automobile industry that will increase the equilibrium investment and due to the demand; interest in the loanable market will increase respectively.