1 / 9

Interest Rate Determination

Interest Rate Determination. Classical Theory Marginal Efficiency of Capital (MEI) – Supply of Funds –. Interest Rate Determination. Classical Theory (cont.) Market Equilibrium Disequilibrium Conditions. Interest Rate Determination. Limitation of the Classical Theory

dalmar
Download Presentation

Interest Rate Determination

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Interest Rate Determination • Classical Theory • Marginal Efficiency of Capital (MEI) – • Supply of Funds –

  2. Interest Rate Determination • Classical Theory (cont.) • Market Equilibrium • Disequilibrium Conditions

  3. Interest Rate Determination • Limitation of the Classical Theory • Loanable Funds Approach –

  4. Interest Rate Determination • Demandors of Funds • Suppliers of Funds

  5. Interest Rate Determination • Loanable Funds Examples:

  6. The Monetarist View of Interest Rates • The Old Quantity Theory • The Classical Quantity Theory

  7. The Monetarist View of Interest Rates • The Modern Quantity Theory • Changes in the Money Supply have 3 effects:

  8. Neo-Keynesian Model • Interest rates are dependent upon… • Transaction Demand – • Speculative Demand – • Examples: • Increasing the money supply  • Decreasing the money supply 

  9. Sources of Risk • Risks Associated with Mortgage Investing

More Related