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If investors sell their stocks and increase their money holdings due to a bad economy then

A. demand for loanable funds will increase.
B. demand for loanable funds will decrease.
C. supply of loanable funds will increase.
D. supply of loanable funds will decrease.
E. quantity demanded of loanable funds will decrease.
I know that the answer isn't C and I have a feeling that it's D because, from what I have learned involving monetary policy - When investors sell their bonds, there is a corresponding decrease in money supply. So it seems that it would similarly make sense with loanable funds. If anyone could help me out just to make sure, that would be fantastic. Thank you.

2 answers

asd
The correct answer is A
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