Which of the following will probably not result in an increase in the business demand for loanable funds?
A) an increase in positive net present value (NPV) projects
B) a reduction in interest rates on business loans
C) a recession
D) none of the above

Question

Quizplus · Accepted Answer

A recession typically leads to a decrease in business demand for loanable funds as businesses may be less willing to invest in new projects or expand operations during an economic downturn. A reduction in interest rates on business loans (choice B) could result in an increase in demand for loanable funds as borrowing becomes cheaper, and an increase in positive NPV projects (choice A) would also likely lead to an increase in demand for loanable funds as businesses seek financing for profitable investments. Therefore, choice C is the most likely option that would not result in an increase in business demand for loanable funds.

Which of the Following Will Probably Not Result in an Increase