Capital - Capital Loanable Funds Interest Rate .Inthesecapital markets,, capital.,b

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Capital, Loanable Funds, Interest Rate The demand and supply for different types of  capital  take place in  capital markets.  In these capital  markets, firms are typically  demanders of capital , while households are typically  suppliers of  capital.  Households supply capital goods  indirectly , by choosing to  save  a portion of their incomes  and lending these savings to banks. Banks, in turn, lend household savings to firms that use these  funds to purchase capital goods.  Loanable funds.  The term  loanable funds   is used to describe funds that are available for  borrowing. Loanable funds consist of household savings and/or bank loans. Because investment in  new capital goods is frequently made with loanable funds, the demand and supply of capital is often  discussed in terms of the demand and supply of loanable funds.  Interest rate.  The  interest rate
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This note was uploaded on 11/19/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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