1. AP ECONOMICS: November 9
Warm-up How does savings contribute to business investment in capital with resulting economic growth? Learning Target In order to have a better understanding of how financial markets work, I will learn how the loanable funds (LF) market determines the real interest rate. I will know I have it when I can: (1) draw a correctly labeled LF market graph; (2) explain how the supply and demand for LF changes; and (3) explain the differences between the money market and the LF market. Loanable Funds (LF) Market (HO) -market where real interest rate is derived—savings and investment decisions are calculated based on some level of inflationary expectation ·changes in borrowing (DLF)—examples
·changes in savings (SLF)—examples
(Note: y-axis in the Money Market vs. in the LF Market)
Assignment
Read Module 29