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February 04, 2006
Investment Property
The Loanable Funds theorists believed in the time preference explanation of how interest arises. According to Loanable Funds theory, interest is the price paid for the use of Loanable Funds. It asserts that the rate of interest is determined by the equilibrium between demand and supply of Loanable Funds in the credit market. The supply of Loanable Funds is derived from four basic sources, namely, savings, dishoarding, bank credit and
From Investment Property
Posted by Sean at February 4, 2006 02:32 PM
