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Shifts in the Market for Loanable Funds definitions

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  • Loanable Funds
    Financial resources available for borrowing, primarily used by firms and governments for investment and spending.
  • Demand Curve
    Graphical representation showing how the quantity of funds desired by borrowers changes with interest rates.
  • Supply Curve
    Graphical representation showing how the quantity of funds provided by savers changes with interest rates.
  • Interest Rate
    Cost of borrowing funds or the return on savings, determined by the equilibrium of supply and demand.
  • Equilibrium
    Point where the quantity of loanable funds supplied equals the quantity demanded, setting the market interest rate.
  • Private Savings
    Funds set aside by households, contributing to the supply of loanable funds in the market.
  • Public Savings
    Funds retained by the government when tax revenue exceeds spending, increasing supply in the market.
  • Budget Deficit
    Situation where government spending surpasses tax revenue, increasing demand for loanable funds.
  • Budget Surplus
    Situation where government tax revenue exceeds spending, contributing to public savings and supply.
  • Corporate Tax Rate
    Percentage of profits firms must pay to the government, affecting their willingness to invest and borrow.
  • Investment Incentives
    Factors, such as expected profits or tax breaks, motivating firms to borrow funds for investment.
  • Savings Incentives
    Benefits, like tax breaks, encouraging households to save more, increasing supply of loanable funds.
  • National Savings
    Combined total of private and public savings, forming the overall supply of loanable funds.
  • Quantity Supplied
    Amount of loanable funds offered by savers at a given interest rate.
  • Quantity Demanded
    Amount of loanable funds sought by borrowers at a given interest rate.