The amount of deposits in the Federal Reserve drives the demand for loanable funds and interest going rate.
The Federal Reserve is a federal entity which provides the service of holding the reserves of banks and government as the law requires.
The law does ensures that every banks (mostly commercial banks) have a minimum amount of reserves with bank to guarantee smooth business operation of the banks.
Thus, if a bank have problem with maintaining its reserves, then its ability to give out loan to customers will be affected.
Thus, the Option D is correct because the amount of deposits in the Federal Reserve drives the demand for loanable funds and interest going rate.
The missing options includes "The amount of money printed by the U.S. Treasury, Time preferences of market participants, Animal spirits, The amount of deposits in the Federal Reserve"
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