A determinant of the supply of loanable funds is:
A)wealth.
B)expectations of future economic conditions.
C)social welfare policies.
D)All of these are determinants of the supply of loanable funds.

Question

Quizplus · Accepted Answer

All of these factors (wealth, expectations of future economic conditions, and social welfare policies) can affect the supply of loanable funds.

Wealth: If individuals or institutions have more wealth, they may be willing to lend more money, increasing the supply of loanable funds.

Expectations of future economic conditions: If lenders anticipate a future increase in interest rates, they may choose to hold onto their funds, decreasing the supply of loanable funds. Alternatively, if they expect a future decrease in interest rates, they may lend more, increasing the supply.

Social welfare policies: Government policies, such as tax incentives or subsidies for saving, can encourage individuals and institutions to save more, increasing the supply of loanable funds. Alternatively, policies that decrease the incentive to save (such as high inflation) may decrease the supply of loanable funds.

A Determinant of the Supply of Loanable Funds Is