Savings represents the supply of loanable funds available for borrowers, such as investors or businesses, to borrow in financial markets. It represents the amount of money that individuals or households are willing to save and deposit in a bank or invest in other financial instruments, such as bonds or stocks. Therefore, choice B, the supply of loanable funds, is the best answer.

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Savings Represents

Question 16

Multiple Choice

Savings represents

A) the demand for loanable funds.
B) the supply of loanable funds.
C) the minimum interest rate people are willing to accept (i.e.,the "reservation" interest rate) .
D) only funds supplied by foreigners,because Americans don't save.
E) the willingness of firms to borrow.

Correct Answer: