Which of the Following Is Included in the Demand for Loanable

question 93

Multiple Choice

Which of the following is included in the demand for loanable funds?

• A)investment and government borrowing
• B)investment but not government borrowing
• C)government borrowing but not investment
• D)neither government borrowing nor investment

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Definitions:

Market for Euros

A foreign exchange market where Euros are traded against other currencies.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international trade and considered a key global reserve currency.

Flexible Exchange-Rate System

A currency valuation system where the value of a currency is allowed to fluctuate in response to foreign exchange market mechanisms.

Foreign-Exchange Reserves

Stockpiles of foreign currencies maintained by a nation’s central bank. Obtained when the central bank sells local currency in exchange for foreign currency in the foreign exchange market.