Sunday, March 29, 2015

Video 4

http://www.youtube.com/watch?v=rdM44CC0ELY&feature=bf_next&list=PL2CB281D126F65E26&lf=results_video

          In video 4, they discussed about loan-able funds. When the interest rate is low, people demand more money. The DLF line is always down ward sloping. When the interest rate is higher, people have an instinct to borrow, this discourages the government.
         The SLF- is the amount of money people have in the bank, it is dependent on savings. The more money people save, the more money banks have available to make loans. Who would they loan the money to? The answer is future businesses, and customers etc...

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