Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 5: Q. 24 (page 130)

What is the formula for elasticity of savings with respect to interest rates?

Short Answer

Expert verified

The formula for the elasticity of savings isE=%∆S%∆I.

Step by step solution

01

Step 1. Elasticity of saving

The ratio of percentage change in saving quantity to percentage change in interest rate is known as elasticity of saving. In the financial market, the elasticity of saving is calculated.

02

Step 2. Formula

This formula can be used to describe the supply curve's shape. The formula is as follows:

Elasticity of saving=%changeinquantitysupply%changeininterestrate

orE=%∆S%∆I

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?

If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on quantity?

Describe the general appearance of a demand or a supply curve with infinite elasticity.

A city has built a bridge over a river and it decides

to charge a toll to everyone who crosses. For one year,

the city charges a variety of different tolls and records

information on how many drivers cross the bridge. The

city thus gathers information about elasticity of demand.

If the city wishes to raise as much revenue as possible

from the tolls, where will the city decide to charge a toll:

in the inelastic portion of the demand curve, the elastic

portion of the demand curve, or the unit elastic portion?

Explain.

Say that a certain stadium for professional football has 70,000 seats. What is the shape of the supply curve for tickets to football games at that stadium? Explain.
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free