An article in the Economist magazine in 2012 observed: America can now borrow from the bond market
Question:
An article in the Economist magazine in 2012 observed:
“America can now borrow from the bond market at a cheaper rate than at any time in the history of the republic.” Use the loanable funds model to analyze how this statement could be true even though the United States was running a large budget deficit in 2012.
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The loanable funds model is a framework used to analyze the interaction between the supply of and demand for loanable funds which represent savings available for investment in financial markets In thi...View the full answer
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Related Book For 
Money Banking And The Financial System International Edition
ISBN: 978-1292000183
2nd Edition
Authors: R. Glenn Hubbard ,Anthony P Obrien
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