Asked by Dylan Wright on Jul 04, 2024
Verified
An increase in the demand for loanable funds may be caused by a(n)
A) increase in the availability of loanable funds.
B) increase in consumers' willingness to save.
C) increase in business borrowing.
D) decrease in the interest rate.
Loanable Funds
A term in economics referring to all the money available for lending by banks or other financial institutions, influenced by savings and investments.
Business Borrowing
The act of obtaining funds by businesses from external sources like banks or financial institutions to finance operations or investments.
- Uncover the determinants that precipitate changes in the supply and demand dynamics of loanable funds.
- Apprehend the association between the determination of investments and adjustments in interest rates.
Verified Answer
ZK
Zybrea KnightJul 09, 2024
Final Answer :
C
Explanation :
An increase in business borrowing directly leads to an increase in the demand for loanable funds, as businesses seek more capital for investment and expansion.
Learning Objectives
- Uncover the determinants that precipitate changes in the supply and demand dynamics of loanable funds.
- Apprehend the association between the determination of investments and adjustments in interest rates.