Loadable Funds Market
- IS interest rate of 50% good or bad?
- bad for borrowers but good for lenders
- loadable funds market is private sector supply and demand of loans
- this market brings together those who want to lend money (savers) and those who want to borrow(firms with investment spending projects)
- this market shows effect of real interest rate
- demand- inverse relationship between real interest rate and quantity loan demanded
- Supply- direct relationship between real interest rate and quantity loans supplied
- supply is not vertical
Federal fund rate
- interest rate that banks charge one another for over night loans
Prime rate
- Interest rate that the banks charge their credit worthy customer
Fantastic Blog! If I were you I would definitely add under "supply is not vertical" that "This is NOT the same as the money market." That would be it. Great job!
ReplyDelete