Archive | Interest

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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Keynes’ Liquidity Preference Theory of Interest | Economics

In this article we will discuss about:- 1. Introduction to Keynes Liquidity Preference Theory of Interest 2. Demand for Money 3. Supply of Money 4. Determination of Rate of Interest 5. Changes in Demand for and Supply of Money 6. Significance of Liquidity Preference Theory of Interest 7. Criticisms 8. Conclusion. Introduction to Keynes Liquidity Preference Theory of Interest: Keynes, [...]

By |2018-08-13T06:52:04+05:30August 13, 2018|Liquidity Preference Theory|Comments Off on Keynes’ Liquidity Preference Theory of Interest | Economics
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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
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