Loanable funds refer to money available for borrowing, which encompasses both the act of lending money (with the expectation of earning interest) and the act of borrowing money (with the commitment to pay interest).

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Loanable Funds Are

Question 25

Multiple Choice

Loanable funds are

A) another term for capital.
B) a particular type of investment fund that companies such as Merrill Lynch offer to consumers.
C) funds that someone borrows with a promise to pay interest for the use of the funds.
D) funds that someone lends with the requirement that interest be paid for the use of the funds.
E) c and d

Correct Answer: