Sunday, March 27, 2016

Unit 4 – Money & Banking / Monetary Policy (3-26-16)

Ap Macroeconomics Unit 4- The Loanable Funds Market

Part 7

https://www.youtube.com/watch?v=rdM44CC0ELY&list=PL2CB281D126F65E26&index=6

Overview-

The Loanable Funds graph is labeled by y-axis being price and Quantity of funds of the x-axis. The demand for loanable funds is downward slopping as for supply it is upward slopping. The reason that supply is that supply is dependent on the savings and will only increase when the people have a reason to spend money and vise versa when supply decreases (people want to save money). The government if on the other hand wants to go through with a deficit then they will have a demand for that money and increase the loanable funds that the people can "use".

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