(Figure: Market for Loanable Funds 2) Based on the Graph

Multiple Choice

(Figure: Market for Loanable Funds 2) Based on the graph, if households decide to save a larger portion of their income because they fear job loss due to a recession, the loanable funds supply curve will shift from _____ to _____, and the new equilibrium will be at point _____, holding demand constant at D₀.

A) S₀; S₁; a
B) S₀; S₁; b
C) S₁; S₀; b
D) S₁; S₀; d