Question

In the financial market, what causes a movement along the supply curve? What causes a shift in the supply curve.

Short answer

A shift along the supply curve is caused by changes in the interest rate (i.e., the price of financial capital). The supply curve would be shifted by any change in anything else that impacts the supply of financial capital (a non-price variable), such as income or future wants.

Step-by-step solution

Definition

Financial market:

Financial market refers to the system where securities such as derivatives, bonds, stocks, etc are exchanged.

Explanation

Adjustments in the pay rate, often known as the supply curve, cause supply curve movement in the labor market. A shift along the supply curve is caused by changes in the interest rate (i.e., the price of financial capital). The supply curve would be shifted by any change in anything else that impacts the supply of financial capital (a non-price variable), such as income or future wants.

Conclusion

Therefore, changes in the factors affecting the supply of capital cause the supply curve to shift.