Question
Please explain all of the following and clearly label the question that is being answered: How foreign exchange is a determinant of the demand of
Please explain all of the following and clearly label the question that is being answered:
How foreign exchange is a determinant of the demand of loanable funds
How expectation for the future of the economy is a determinant for the demand for loanable funds
How a government budget surplus in a given year decreases the demand for loanable funds (the opposite of deficit spending)
What is crowding in (the opposite of crowding out)
How expectation for the future economy is a determinant of the supply of loanable funds
What a liquidity trap is
Why an increase in the money supply will lead to an increase in real GDP only in the short run -- in the long run money demand will increase putting the interest rate right back where it started, at the natural rate of interest.
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