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Optimal inventory levels are lower when carrying costs are high,and when the cost of restocking inventories is low.
Interest Rate
The cost paid on borrowed assets or the compensation for the use of borrowed money, usually expressed as a percentage of the total amount borrowed.
Loanable Funds
The sum of money available for borrowing, constituted by savings and investments, often determining interest rates in financial markets.
Equilibrium Interest Rate
The interest rate at which the demand for money balances equals the supply of money, resulting in a stable economic situation without a tendency for the interest rate to change.
Loanable Funds
The money available for borrowing, encompassing both the savings of individuals and institutions and the money created by banks.
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