Loan-able funds theory is used to determine

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Loan-able funds theory is used to determine

A. savings

B. interest rate

C. future value

D. present value

Answer: Option B

Solution (By Examveda Team)

Loan-able funds theory is used to determine future value. The loanable funds doctrine is a theory of the market interest rate. According to this approach, the interest rate is determined by the demand for and supply of loanable funds. The term loanable funds includes all forms of credit, such as loans, bonds, or savings deposits.

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