Tag Archives | Interest

Classical Theory of Interest: Assumptions, Demand, Features and Criticisms | Economics

In this article we will discuss about:- 1. Assumptions of Classical Theory of Interest 2. Supply and Demand for Capital 3. Determination of Rate of Interest 4. Features of Classical Theory 5. Criticisms. The economists like Ricardo, J. S. Mill, Marshall and Pigou developed the, classical theory of interest which is also known as the capital theory of interest or [...]

By |2018-08-13T06:52:04+05:30August 13, 2018|Classical Theory of Interest|Comments Off on Classical Theory of Interest: Assumptions, Demand, Features and Criticisms | Economics

Modern Theory of Interest Rate | Economics

According to the modern theory, there are four determinants of the rate of interest: (a) The saving function, (b) The investment function, (c) Liquidity preference function and (d) The quantity of money. The equilibrium between these four variables together determines the rate of interest as well as the equilibrium level of income. According to Hansen, "An equilibrium condition is reached, [...]

By |2018-08-13T06:52:04+05:30August 13, 2018|Modern Theory of Interest Rate|Comments Off on Modern Theory of Interest Rate | Economics

Neo-Classical Loanable Funds Theory of Interest: Assumptions, Demand and Interest

In this article we will discuss about:- Introduction to Neo-Classical Loanable Funds Theory of Interest 2. Assumptions of Neo-Classical Loanable Funds Theory of Interest 3. Supply of Loanable Funds (LS) 4. Demand for Loanable Funds (LD) 5. Determination of Rate of Interest 6. Cumulative Process and Monetary Equilibrium 7. Improvement over Classical Theory 8. Criticisms. Introduction to Neo-Classical Loanable Funds [...]

By |2018-08-13T06:52:04+05:30August 13, 2018|Neo-Classical Loanable Funds|Comments Off on Neo-Classical Loanable Funds Theory of Interest: Assumptions, Demand and Interest
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