José is putting money for college in a savings account.The bank makes the money available to business borrowers.In essence:
A) José is supplying loanable funds for business investment.
B) José is a demander of loanable funds.
C) the interest rates that businesses pay are independent of the actions of suppliers of funds such as José.
D) financial markets are not performing the role of intermediary.

Question

Quizplus · Accepted Answer

José is supplying loanable funds for business investment by putting money in a savings account which the bank uses to make loans to businesses.

Answer: NOT B, NOT C, NOT D 
 Option B is incorrect because José is not borrowing money, he is saving money. Option C is incorrect because the interest rates that businesses pay are affected by the supply and demand of loanable funds, including the actions of suppliers of funds such as José. Option D is incorrect because financial markets are performing the role of intermediary by connecting suppliers of loanable funds such as José with demanders of loanable funds such as businesses.

José Is Putting Money for College in a Savings Account