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Explain the loanable funds theory
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- Explain the loanable funds theory of interest rates.If and when the demand of loanable funds shifts to the left:The Loanable Funds Theory suggests that the market interest rate is determined by the factors that control supply of and demand for loanable funds. Discuss the factors that affect interest rates.
- Usually, when the supply of loanable funds increases, then interest rates Select one: a. Might increase or decrease. b. Increase. c. Remain unchanged. d. Decrease.What happen to the demand in market of loanable funds when NCO>0 and NCO<0?What factors make up the total demand for loanable funds? The total supply of loanable funds. Please list and define each of these demand and supply factors in the Loanable Funds Theory of Interest.
- What impact does the government have in the loanable funds market? Forces that change the demand for investment in turn impact the demand for loanable funds. These forces include the change of government policieslist the factors that affect the demand side of the loanable funds market. which factors shift the curve?What must have happened in the loanable funds market to produce the 2020 level of interest rates what caused this change?
- Textbook: Macroeconomics by P. Krugman & R. Wells (5th Edition) Using the accompanying diagram, explain what will happen to the market for loanable funds when there is a fall of percentage points in the expected future inflation rate. How will the change in the expected future inflation rate affect the equilibrium quantity of loanable funds?What impact will increases in income have on the Market for Loanable Funds? A) Decrease Supply B) Decrease Demand C) Increase Demand D) Increase SupplyHow does an increase in government borrowing affect the equilibrium interest rate in the market for loanable funds?
