FInance

The slope of the demand for loanable funds curve represents the negative relation between the real interest rate and investment
Other things the same, a higher interest rate induces people to save more, so the supply of loanable funds slopes upward
The supply of loanable funds slopes upward because an increase in the interest rate induces people to save more
If the quantity of loanable funds supplied exceeds the quantity of loanable funds demanded there is a surplus and the interest rate is above the equilibrium level
If the demand for loanable funds shifts to the right, then the equilibrium interest rate and quantity of loanable funds rises
The real interest rate is the interest rate corrected for inflation
If the nominal interest rate is 7 percent and the rate of inflation is 3 percent, then the real interest rate is 4 percent
If in the past Congress had taken additional actions to make saving more rewarding, then today it is likely that the equilibrium interest rate would be lower and the equilibrium quantity of loanable funds would be higher.
A budget deficit changes the supply of loanable funds
If Congress instituted an investment tax credit, the equilibrium quantity of loanable funds would rise
What is the future value of $500 one year from today if the interest rate is 6 percent? $530
At an annual interest rate of 14 percent, about how many years will it take $100 to double in value? 5

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