An increase in the demand for loanable funds could be best explained by which of the following?
A. There is a decrease in investment spending.
B. Firms are optimistic about the future performance of the country’s economy.
C. Domestic investors seek higher returns by investing in foreign financial assets.
D. The economy is facing political instability.

Question

03-05-2022
Business

contestada

An increase in the demand for loanable funds could be best explained by which of the following?
A. There is a decrease in investment spending.
B. Firms are optimistic about the future performance of the country’s economy.
C. Domestic investors seek higher returns by investing in foreign financial assets.
D. The economy is facing political instability.

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luisvaschetto luisvaschetto · Answer 1 · 2022-05-11T10:50:00+02:00

An increase in the demand for loanable funds could be best explained by firms who are optimistic about the future performance of the country's economy.

What are loanable funds?

The loanable fund refers to funds that have been lent out to borrowers as part of different types of investments.

These funds (loanable funds) belong to a market where loans are distributed to borrowers having different projects.

In conclusion, an increase in the demand for loanable funds could be best explained by firms who are optimistic about the future performance of the country's economy.

Learn more about loanable funds here:

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