What Happens to Each of the Following If the Supply

question 124

Essay

What happens to each of the following if the supply of loanable funds shifts right?
a. the interest rate
b. net capital outflow
c. the exchange rate

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Definitions:

Non-Amortized Debt

A loan in which the principal amount borrowed does not decrease through regular payments over the term of the loan.

Principal

The original sum of money borrowed in a loan or the initial amount of investment, excluding any interest or growth.

Maturity

The date on which a financial obligation must be repaid in full.

Loanable Funds

The money available for borrowing in the financial market, influenced by savings, borrowing, and interest rates.