loanable funds market - market where savers and borrowers exchange funds (Q lf) at real rate of interest (r%)
Demand for loanable funds comes from or borrowing households, firms, govs, and foreign sectors.
supply - or savings comes from h, f, govs, and fs. supply is demand for bonds
demand = borrowing
more borrowing = more demand for loanable funds
less borrowing = less demand for loanable funds
When government does fiscal policy it will affect the loanable funds market
changes in real int rate will affect gross private investment.
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