ng th syn tribe Government Demand for Loanable Funds Governments demand loanable funds when planned expenditures are not covered by incoming revenues. Government demand is said to be interest inelastic insensitive to interest rates. Expenditures and tax policies are independent of the level of interest rates. (Exhibit 2.3) Powe ng th syn tribe Government Demand for Loanable Funds Governments demand loanable funds when planned expenditures are not covered by incoming revenues. Government demand is said to be interest inelastic insensitive to interest rates. Expenditures and tax policies are independent of the level of interest rates. (Exhibit 2.3) Powe