Which factor will decrease 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

Social Insurance

Programs designed to provide protection against economic risks (such as unemployment, disability, or old age) largely based on contributions that reflect a person's earnings.

Loanable Funds

The pool of money available for borrowing in the financial markets, governed by interest rates, which balance the supply of savers and the demand by borrowers.