In the classical model,the demand for loanable funds comes from
A) consumption expenditures and the government deficit,if any
B) net taxes and government expenditures
C) government purchases
D) investment spending and the government deficit,if any
E) consumption expenditures,investment spending and government purchases

Question

Quizplus · Accepted Answer

According to the classical model, the demand for loanable funds comes from investment spending and the government deficit, if any. Consumption expenditures and government purchases are not considered in the demand for loanable funds in the classical model. Net taxes are also not a factor in the demand for loanable funds as they only affect disposable income, which in turn affects consumption expenditures.

In the Classical Model,the Demand for Loanable Funds Comes from