The demand for loanable funds is determined by the willingness of ________ to borrow money to engage in new investment projects.

Question

Quizplus · Accepted Answer

The demand for loanable funds is primarily driven by firms or businesses who require funds for investment in new projects, expansion of existing businesses or for working capital. Government and households may also borrow money, but firms are the primary drivers of the demand for loanable funds. Banks and foreigners are not the ones who demand loanable funds, although banks are intermediaries that channel the savings of households to borrowers such as firms and governments.

The Demand for Loanable Funds Is Determined by the Willingness