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1. Fill in the blanks to make the following statements correct.

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a. An increase in the interest rate leads households to __________ their current spending and __________ their current saving. The result is a(n) __________ in the quantity of financial capital supplied.

 

b. An increase in current income leads to a(n) __________ in household saving at any given interest rate. This results in a __________ in the economy’s supply curve for capital.

 

c. An increase in expected future income leads to a(n) __________in current household spending. The result is a(n) __________ in household saving and therefore a(n) __________ in the quantity of capital supplied at any given interest rate. This is represented by a__________ in the economy’s supply curve for financial capital.

 

dolution

 
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