Explain How Each of the Following Events Affect the Supply

question 74

Essay

Explain how each of the following events affect the supply of loanable funds curve:
a) The economy is in a recession so people's disposable income is lower.
b) The stock market is booming so the people's wealth is higher.
c) Fewer college graduates are finding jobs so expected future income is lower.
d) The real interest rate increases.

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Definitions:

Good Faith

A principle that emphasizes honesty, fairness, and integrity in the fulfillment of contractual obligations or in negotiations.

Reasonable Commercial Standards

A legal concept referring to the standard practices and methods used by reasonably prudent and competent parties in a particular industry.

Honesty

The quality of being truthful and free from deceit or fraud.

Holder In Due Course

A legal term for a party that has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defects in title and prior claims.