6 min read
This study guide covers the loanable funds market, focusing on the interaction between borrowers and savers. It explains the demand and supply of loanable funds, their relationship with the real interest rate, and factors that shift these curves (BIG DEE and FELS mnemonics). The guide also covers market equilibrium and the impact of shifts on the equilibrium real interest rate and quantity. Finally, it provides exam tips, including common question types, policy implications, and strategies for success.
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Question 1 of 10
Ready to dive in? 🚀 In the loanable funds market, who are the key players and what 'price' brings them together?
Stockholders and bond yields
Borrowers, savers, and the nominal interest rate
Borrowers, savers, and the real interest rate
Banks, investors, and the inflation rate