Which of the following would be the most likely to cause an increase in the demand for loanable funds?
A) a decrease in the interest rate
B) an increase in savings
C) a decrease in consumption
D) an increase in government borrowing

Question

Quizplus · Accepted Answer

An increase in government borrowing would increase the demand for loanable funds as the government would need to borrow more money from financial markets to finance their spending. This would lead to an increase in the interest rates as well. The other options would not directly increase the demand for loanable funds.

Which of the Following Would Be the Most Likely to Cause