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Question 73 / 96:  Identify what happens to interest rates when a community saves more in general, and generalize the signal that this sends to entrepreneurs.
Answer: 

Interest rates tend to go down when people save more. This effectively

signals entrepreneurs that they should borrow and invest

more, in longer-term projects.

Sample Partial Credit Answer

Interest rates go down.
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Capitalism: The Market Economy

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Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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