An increase in the domestic demand for loanable funds would MOST likely be caused by a(n):

Question

Quizplus · Accepted Answer

An increase in expected business opportunities would lead businesses to seek out more funding to pursue those opportunities, which would increase the domestic demand for loanable funds. A decrease in expected business opportunities would likely have the opposite effect. An increase in the market interest rate may lead to a decrease in the domestic demand for loanable funds as borrowing costs become more expensive. An increase in business tax rates may also decrease the demand for loanable funds as businesses have less disposable income to invest.

An Increase in the Domestic Demand for Loanable Funds Would