A decrease in the demand for loanable funds would MOST likely be caused by a(n):

Question

Quizplus · Accepted Answer

A decrease in expected business opportunities would lead to a decrease in demand for loanable funds as businesses would have less need to borrow money to invest in projects and expand their operations. A decrease in market interest rates would actually lead to an increase in demand for loanable funds as it would become cheaper to borrow money. A decrease in corporate income tax rates would also not have a direct impact on the demand for loanable funds. An increase in expected business opportunities would likely lead to an increase in demand for loanable funds as businesses would need to borrow more money to invest in these opportunities.

A Decrease in the Demand for Loanable Funds Would MOST