What is the source of the supply of and demand for loanable funds, respectively?
A) saving and investment
B) investment and saving
C) saving and saving
D) investment and investment

Question

Quizplus · Accepted Answer

The source of the supply of loanable funds is savings, as individuals and institutions save part of their income and deposit it into financial institutions like banks. These banks then lend the money to other individuals and institutions as loans. The source of demand for loanable funds is investment, as businesses and individuals borrow money to invest in projects and other ventures. Therefore, choice A (saving and investment) is the correct answer.

What Is the Source of the Supply of and Demand