Question

Which of the following is not true?

A. Banks and other financial intermediaries help make the market for loanable funds fluid and ease transactions by helping match one person’s savings with another person’s investment.
B. The market for loanable funds works like any other competitive market with many buyers and many sellers.
C. The market for loanable funds is comprised of those who want to save (the suppliers of funds) and those who want to borrow (the demanders of funds) Where the supply curve for loanable funds and the demand curve for loanable funds intersect determines the size of the budget deficit.

Answer 1

Answer: C. The market for loanable funds is comprised of those who want to save (the suppliers of funds) and those who want to borrow (the demanders of funds) Where the supply curve for loanable funds and the demand curve for loanable funds intersect determines the size of the budget deficit.

This statement is not true because where the supply curve and demand curve meet is the equilibrium interest rate, and not the size of budget deficit.

Step-by-step explanation: