Copyright

The demand for loanable funds: 1. increases if wealth increases 2. increases if population growth...

Question:

The demand for loanable funds: 1. increases if wealth increases 2. increases if population growth decreases 3. increases in an expansion and decreases in a recession 4. decreases in an expansions and increases in a recession 5. increases if the expected rate of profit decreases

Loanable Fund:

The loanable fund refers to the total of all the money people and institution in an economy have chosen to preserve and grant out to acquire as an investment rather than use for personal consumption. It is the concept of the market rate of interest.

Answer and Explanation:

The demand for the loanable fund is the hypothetical curve which represents the readiness to borrow money to fund investment project; as the interest rate reduction, the number of loans needed will rises. If there is any variation in the investment demand, it will shift the demand for the loanable fund. The want for more funds means, in change, a wish for the add loanable fund. (Correct Answer_3)


Learn more about this topic:

Loading...
Loanable Funds: Definition & Theory

from Introduction to Business: Homework Help Resource

Chapter 25 / Lesson 29
64K

Related to this Question

Explore our homework questions and answers library