Question

The market for – is where savers supply funds for loans to borrowers. this market is critical to an economy's output, or gdp. firms can only generate – after they have produced something, and unless they have a reserve of unused cash they cannot pay for –, like machines and workers, unless they can borrow first. therefore, without this market, many firms could not get started.

Answer 1

The market for "loanable funds" is where savers supply funds for loans to borrowers. this market is critical to an economy's output, or gdp. firms can only generate "revenue" after they have produced something, and unless they have a reserve of unused cash they cannot pay for "investments", like machines and workers, unless they can borrow first. therefore, without this market, many firms could not get started.

The market for loanable assets demonstrates the connection among borrowers and moneylenders that decides the market financing cost and the amount of loanable assets traded. The market for loanable assets comprises of two performers, those loaning the cash and those obtaining the cash which are usually the firms who look to invest the cash.