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- Subject
- Financial Markets and Fundsfinance-mcqs › financial-markets-and-funds
- Published
- 12 May 2023
- Last updated
- 28 May 2026
Explanation
The loanable funds theory describes how interest rates are determined by the balance of demand and supply for loanable capital in financial markets, unlike other theories such as the savings fund or borrowing theories.
More Financial Markets and Funds MCQs
Practice related questions from the same subject.
- 1.How does a rise in the equilibrium interest rate affect restrictiveness under other non-price factors?
- 2.What does it indicate when companies begin to finance their investments using internally generated funds?
- 3.Loans taken for purchasing vehicles and household appliances fall under which category of goods?
- 4.What term describes the total accumulation of previous budget deficits over time?
- 5.Which category do plant and equipment belong to?
- 6.What occurs in the financial market when the interest rate exceeds the equilibrium borrowing rate for loanable funds?
- 7.When the equilibrium interest rate rises, how does the movement along the supply of funds curve manifest?
- 8.What type of relationship must exist between the supply and demand of funds to ensure there is no shortage of funds?
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