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10 Cards in this Set
- Front
- Back
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Loanable funds market |
the market where saves supply funds for loans to borrowers |
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Interest rate |
a price of loanable funds, quoted as a percentage of the original loan amount |
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Real interest rate |
the interest rate that is corrected for inflation |
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Nominal interest rate |
the interest rate before it is corrected for inflation |
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Fisher equation |
states that: real interest rate = nominal interest rate - inflation rate |
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Time preferences |
refers to the fact that people prefer to receive goods & services sooner rather than later |
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Consumption smoothing |
when people borrow & save in order to smooth consumption over their lifetime |
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Dissaving |
when people withdraw funds from their previously accumulated savings |
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Savings rate |
personal saving as a portion of disposable (after-tax) income |
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Investor confidence |
a measure of what firms expect for future economic activity |
