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 __ elastic negative perfectly elastic inelastic

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 __ elastic negative perfectly elastic inelastic

Answer 1

The correct answer is:**inelastic**### Explanation:In the short run, the supply of financial capital (savings) tends to be **inelastic** with respect to the interest rate. This means that changes in the interest rate have a relatively small effect on the amount of savings supplied. People’s saving behavior is influenced by various factors, such as income levels, consumption needs, and long-term financial goals, which are not immediately responsive to short-term changes in interest rates. Therefore, the elasticity of savings with respect to the interest rate is generally low (inelastic) in the short run.

Problemas

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 __ elastic negative perfectly elastic inelastic

Roztwór

Respuesta