Examlex
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Loanable Funds
The money available for borrowing in the financial markets, determined by saving behaviors and institutional lenders' policies.
Interest Rate
The cost of borrowing money or the return on deposited funds, expressed as a percentage of the principal.
Loanable Funds Theory
The Loanable Funds Theory is an economic principle that posits the market interest rates are determined by the supply and demand for loans, where saving provides the supply and investments demand the funds.
Equilibrium Interest Rate
The interest rate at which the quantity of loanable funds demanded equals the quantity of loanable funds supplied, resulting in a balance between savings and investment.
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