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11 January, 15:35

Suppose a large percentage of young workers move from their early earning years to their prime earning years. This change would cause

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  1. 11 January, 17:00
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    The supply of loanable funds will increase and the interest rate will decrease

    Explanation:

    As the youngsters entered their prime earning years, the likelihood of new businesses to emerge is also increased. This increase the amount of loanable funds that are most likely used to purchase capital needed for the businesses (such as to purchase new properties, materials, workers, etc)

    As this happen, loan provider will reduce the interest rate for their loan. They do this to make sure that the young entrepreneurs choose to obtain loan from them rather than their competitors.
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