Sources of loanable funds do not include:
A)current savings
B)the expansion of deposits by depository institutions
C)federal deficits
D)all the above are sources of loanable funds

Question

Quizplus · Accepted Answer

Federal deficits are not sources of loanable funds. Loanable funds come from current savings, the expansion of deposits by depository institutions, and other sources such as foreign investments and corporate profits. Federal deficits refer to the amount by which government spending exceeds revenue, and they require borrowing from the public or the Federal Reserve, which may increase the supply of money but do not increase the pool of loanable funds available for investment.

Sources of Loanable Funds Do Not Include