0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What affects demand and supply for loanable funds?
Interest rate, time preference, consumption smoothing, inflation expectations
What happens when the bonds supply curve becomes negatively sloped?
when we use the "loanable funds frame work" the Bs become negative.\ Supplying a bond = demanding a loan = demanding loanable funds. Demanding a bond = supplying a loan = supplying loanable funds.
Why in an open economy does the supply of loanable funds slopes upward?
The supply of loanable funds slopes upwards in an open economy because there are more funds available. An open economy allows for more money to be put into the economy.
What happens with an increase in deficit spending?
the demand for loanable funds will increase, interest rates will increase
How does a government budget surplus affect interest rates and investment and economic growth?
In a budget surplus the government receieves more tax than it spends (taxation>government spending), therefore the government will not need to rely on borrowing money from banks in order to funds its projects There is less demand for borrowed money Therefore in a demand a supply diagram for loanable funds, it can be shown that if demand decreases, the price of interest rates will also decrease. Investment becomes more cheaper, and would potentially increase investment, increasing economic growth. However, this effect is only minor compared to to the effect of increased taxing - this will reduce dispoable income of firms and consumers, reducing their ability to borrow funds.
Will interest rates increase if the demand for loanable funds increases?
yepp. draw a loanable funds graph. http://www.schooltube.com/video/0fd3f5c29ca74dc5af00/Fiscal%20Policy
Who the major demanders of loanable funds are?
they are the major demanders of loanable funds.
What affects demand and supply for loanable funds?
Interest rate, time preference, consumption smoothing, inflation expectations
What happens when the bonds supply curve becomes negatively sloped?
when we use the "loanable funds frame work" the Bs become negative.\ Supplying a bond = demanding a loan = demanding loanable funds. Demanding a bond = supplying a loan = supplying loanable funds.
What are the two basic sources of loanable funds?
short term funds and currency
Why in an open economy does the supply of loanable funds slopes upward?
The supply of loanable funds slopes upwards in an open economy because there are more funds available. An open economy allows for more money to be put into the economy.
What happens with an increase in deficit spending?
the demand for loanable funds will increase, interest rates will increase
What is the basis of the relationship between the fisher effect and the loanable funds theory?
The borrowers desire to achieve a positive real interest.
Who the main suppliers of loanable funds are?
The suppier are people who saves money, While the demanders are people who borrow the money . NA GOD #
How much gold does the imf hold?
As of the last update it has $201bn of loanable funds and about $65bn already loaned. The way it raises these funds needs more space to answer but is worth investigating. Hope that helps.
How does a government budget surplus affect interest rates and investment and economic growth?
In a budget surplus the government receieves more tax than it spends (taxation>government spending), therefore the government will not need to rely on borrowing money from banks in order to funds its projects There is less demand for borrowed money Therefore in a demand a supply diagram for loanable funds, it can be shown that if demand decreases, the price of interest rates will also decrease. Investment becomes more cheaper, and would potentially increase investment, increasing economic growth. However, this effect is only minor compared to to the effect of increased taxing - this will reduce dispoable income of firms and consumers, reducing their ability to borrow funds.
What is intermediate market?
In an intermediated market, a financial institution is responsibile for the channeling of loanable funds from individual and corporate savers to borrowers. Unlike the non-intermediated market, the intermediated market is considered to be a more in-direct form of borrowing.
