Working capital indicates revolving a circular flow of cash starting with cash paid for purchase of material and ending with cash receipt after the sale of finished goods. This is how working capital is a circular cash flow from cash to inventories and back to cash. According to Shubin, "working capital is the amount of funds necessary to cover the [...]
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, [...]
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 [...]