2CHAPTER 2 OVERVIEWThis chapter will:A.Apply loanable funds theory to explain why interest rates changeB.Identify the most relevant factors that affect interest rate movementsC.Explain how to forecast interest rates
3A. Loanable Funds Theory1.Determinants of the Demand for Loanable Funds-Household Demand for Loanable FundsThere exists an inverse relationship between the interest rate and the quantity of loanable funds demanded.
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