09 The Market for Loanable Funds
Misconception - The government sets interest rate.
What is the Loanable Funds Markets?
The loanable funds markets is the market where saveers supply funds for loans to borrowers.
- Interest Rates as a Reward for Saving
- Interest Rates as a Cost for Borrowing
- How Inflation Affects Interest Rates
What factors shift the supply of loanable funds?
- Income and Wealth
- Time Preferences
- Consumption Smoothing
What factors shift the demand of loanable funds?
- Productivitiy of Capital
- Invector Confidence
How do we apply the loanable funds market model?
- Equilibrium
- A Decline in Invector Confidence
- A Decrease in the Supply of Loanable Funds