short essay

Submitted By cowgirls2
Words: 628
Pages: 3
Open Document
The demand and supply of loanable funds is where the different types of capital take place in capital markets. Demand and supply for loanable funds comes from those who want to save and those who want to borrow. Demand for loanable funds comes from the demand for funds from households and businesses who wish to borrow to make investments. Supply for loanable funds comes from those who have extra money to save or lend out. The use of the model of demand and supply is the most important tool of economic analysis; shows how markets work. The demand side of a market is consumers which buy products from firms. The supply side is firms which sell their products to consumers. To further break it done, will be the question of what is loanable funds? Loanable funds can be described as funds that are available for borrowing. Basically, loanable funds consist of household savings and/or bank loans and demand for loanable funds comes from households and businesses who want to borrow to make investments. With the term described above and economists using a model of supply and demand to help with understanding economics brings in the question of what is a loanable funds model. The structure of the loanable funds model is a comparative-statics equilibrium model that employs a supply and demand curve to locate a market-clearing equilibrium price (Evans, 1999, p.1). The model below uses the cost of credit - the interest rate, represented by the variable r. The simple version of the loanable funds model simplifies the complexity by assuming only one "interest rate", which can be thought of a proxy average for the entire structure of interest rates (Evans, 1999, p. 1). This model is using a demand curve which represents the demand for credit by borrowers and the supply curve which represents the supply of credit by lenders.

The demand curve includes consumer borrowers (credit cards, auto loans, home mortgages, installment credit, etc.), businesses of all kinds (corporate borrowing, farm credit, trade credit, etc.) and government uses of credit for all purposes (Evans, 1999, p. 2). Banking can create loanable funds only if its receipts are in excess of its expenditures on good and services. The supply of loanable funds in a region or a nation is dependent on the money supply within its boundaries (Moore, & Hill, 2001, p. 500). Loanable funds come from other areas besides the local economy which may be available to households or firms in the area. Individuals can borrow from insurance
Show More

Related Documents: short essay

Short Essay

Please read and respond to the question(s) at the end of the Ethics in Investing box on page 450, titled, "When Mutual Funds Behaved Badly." The Securities and Exchange Commission (SEC) have recently identified two significant types of trading abuses in the mutual fund industry--market timing and late trading. The most common abuse was market timing, because some favored customs are allowed to trade frequently in mutual fund firms. These actions will harm mutual fund shareholders by increasing…

Words 624 - Pages 3

Short Essay

Transfer Frequently Asked Questions 1. Does Georgia Tech accept applications for each semester? Yes, we accept applications for fall, spring, and summer semesters. Please refer to the Application Timetable on the Transfer Admission website to be sure to get your application and documents submitted on time. 2. Are late applications accepted? Due to the large volume of applications received for each term, only applications received on time and with all requirements met by the Document Deadline…

Words 1153 - Pages 5

Essay on Short Story

I still enjoyed them because most of them were pretty interesting and they weren’t long and exhausting like other short stories I’ve read. They were also very easy to understand. Even though some of the stories were a little longer and not as interesting they were still pretty enjoyable. My favorite short story from this unit was Roald Dahl’s “Lamb of the Slaughter.” This short story was very interesting and it was fun to read because of the suspense and irony of the characters actions. No one…

Words 345 - Pages 2

Short Essay 3

Shannon Vallejo IBUS 130 SP 2015 Short Essay #3 Immigrants and the Integration into Society Every day, adult immigrants are integrating into society in the United States. Many opportunities through labor markets, work experiences, religious institutions, and government sponsored social programs have helped make the transition of citizens between countries effective and efficient. One example that has positively affected my family personally is the use of government sponsored social programs. In…

Words 332 - Pages 2

Short Narrative Essay

Short Narrative Essay Chantel Tankersley Everest University Having a child young opens your eyes to a whole new world. You realize that you have to grow up and put this perfect precious being before yourself, you find a new kind of love for the child you have had the privilege of bringing into this world. I was eighteen when I found out I was pregnant, had just broken up with my boyfriend (the father of the child), was living with my parents and had no job. I was in no way ready…

Words 910 - Pages 4

Short Essay on Christology

Short Essay on Christology Two men approach me and claim that Jesus Christ was a man, but denied his deity. If I were to show them the truth, I would have to explain the biblical basis of Jesus' humanity, deity, explain how he can be both man and God, and explain what this all means to me. First though, biblical explanation of Jesus' humanity is essential. The problem with society nowadays is that some look at the Bible and Jesus as a mythological story or period where his story is considered…

Words 935 - Pages 4

Short Story Essay

the 17th century Puritan region of New England. According to the author, there was a lot of hypocrisy existing in the culture and the reason the author decided to expose this kind of hypocrisy. Using what the reader can call a symbolic approach, the short story follows the journey of Goodman Brown through the forest and his eventual loss of trust and faith in the society. The issue of perspective is primary in these works. The story The Offshore Pirate is presented in an objective point of view…

Words 1797 - Pages 8

short story Essay

Nikita Williams Period 1-2 Short Story Ms. Smith 9/30/14 All I could hear was “Ashleeeeeeeeey” “Ashley, come on get ready for school”, it was my mom calling me. I wasn’t quite registering who was calling me at that very second until I heard my full name, “Ashley Maria Oakley”, that’s when I know my mom means business. My daily routine before getting ready for school is using the bathroom, my hygiene, my hair, eating breakfast and writing in my dairy. It is now 7:25 a.m schools…

Words 1242 - Pages 5

Short Essay 1

Name: Morgan Martin Writing Style Used: APA Course and Section Number: Theo 201-B28 Inspiration and Inerrancy of the Bible "All scripture is given by inspiration of God, and is profitable for doctrine, for reproof, for correction, for instruction in righteousness." (KJV) 2 Timothy 3:16. Every single word of the Scripture is God breathed and is inspired by God. The Bible is the Word of God and God cannot be mistaken or incorrect. To deny the inerrancy of the Bible one must either state…

Words 833 - Pages 4

Short Essay 2

Name: John Shisler Writing Style Used: APA Course and Section Number: THEO 202 – D10 Essay on Anthropology: Marriage and Divorce Marriage is very important within Christianity. It is stated very early on in the Old Testament that God wanted humans to have a partner. Genesis 2:18 (NRSV) states, “Then the Lord God said, “It is not good that the man should be alone; I will make him a helper as his partner.”” God wanted man to have a life partner who could help with watching over the world, could…

Words 842 - Pages 4