Asked by hannah mazzeo on Apr 24, 2024
Verified
Which of the following is not a component of the demand for loanable funds?
A) household purchases of housing and durable consumer goods
B) business purchases of capital goods
C) government financing of the public debt
D) household saving
Loanable Funds
Refers to the funds available for borrowing in the financial markets, determined by the savings of households and organizations.
Public Debt
The total amount of money owed by the government to creditors, often as a result of borrowing to finance public spending.
- Understand the relationship between interest rates, investment decisions, and the demand for loanable funds.
Verified Answer
MA
Muhammad alfayed5 days ago
Final Answer :
D
Explanation :
Household saving is not a component of the demand for loanable funds; rather, it is a source of the supply of loanable funds. The demand for loanable funds is driven by borrowing for investment, consumption, and government spending, not by saving.
Learning Objectives
- Understand the relationship between interest rates, investment decisions, and the demand for loanable funds.