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What will happen to the demand curve for savings if the interest rate in the market...

What will happen to the demand curve for savings if the interest rate in the market for mutual funds were to decrease from 6% to 2%?

Select the correct answer below:

demand curve will shift left

demand curve will shift right

demand curve will not change

it is impossible to know

Please Answer ASAP

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Answer #1

People invest in mutual funds. If returns fall in mutual funds, they will start saving more with the banks.

Hence the demand curve for saving will increase and shift right.

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