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)All of the above will result in an increase in the business demand for loanable funds.

Question

Quizplus · Accepted Answer

During a recession, businesses may not have as many profitable investment opportunities, leading to a decrease in their demand for loanable funds. Therefore, a recession is not likely to result in an increase in the business demand for loanable funds. The other options would likely increase the business demand for loanable funds.

Which of the Following Will Probably Not Result in an Increase