Which Factor Will Increase the Demand for Loanable Funds

question 163

Multiple Choice

Which factor will increase the demand for loanable funds?

• A) a change in the tax law to exempt savings from taxation
• B) expansion of social insurance to cover more fully the cost of retirement
• C) a general business recession that produces high rates of unemployment
• D) a technological advance that increases returns on investments

---

Definitions:

Marginal Revenue

The additional revenue that a company receives from selling one more unit of a product or service.

Profit Maximization

The process or strategy aimed at achieving the highest possible profit for a firm, often by optimizing production and pricing decisions.

Marginal Cost

The rise in expenses incurred by the production of an extra unit of a product or service.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single participant has significant market power.