Over time, with changes in the demand for loanable funds and the supply of loanable funds change the real interest rate will occur. The interest rates will increase with the increase in demand and decrease with increase in supply.
Loanable funds is the sum total of all the money people and entities in an economy have decided to save and lend to borrowers as an investment rather than personal use.
Interest rates can determine how much money lenders are willing to save and invest. When the demand for the loanable funds increases it pushes the rates up, and when the supply of the loanable fund decreases it pushes the rates lower.
Central banks can manipulate the interest rates to influence the economy.
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Answer:
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Explanation:
Answer: monetary policies
Explanation:
The monetary policy is the economic policy used by the central bank to control the supply of money or to mop up the excess liquidity in the economy in order to achieve the objective of controlling inflation in the economy through the use of the following monetary policy instruments
Open market operation : This is used when the central bank feels that the money in circulation is too little and wants to increase it, the bank will buy treasury bill from the commercial banks and give the commercial banks money. This will increase the money in circulation. But if the central bank feels that the money in circulation is too much and it wants to withdraw some, then the central bank sells treasury bill to the commercial banks and collect money from commercial banks this will decrease the money in circulation
Bank Rate : The bank rate determined the interest rate charged by banks on its loan. If the bank rate is high, the interest rate charged by commercial banks will be high.this will discourage the people from taken loan from the bank. But when the central bank reduces the bank rate, this will also make the interest rate to be low which will encourage the people to borrow from the commercial banks.
Cash Reserves : All commercial banks are expected to keep a certain percentage of their total deposit with the central bank. If the cash deposit ratio is increased the quantity of money left for commercial banks to lend out is reduced, but if the cash deposit ratio is reduced, then the quantity of money left for commercial banks to lend out is increased.
The Directives : The central bank may give central directives to commercial banks which they must follow, for example the central bank may ask the commercial banks to give credit for agricultural and industrial expansion. This will be the immediate channels to which credit may be directed.
Special Deposits : If the central bank is so pressed and decides to decrease credit facilities or the availability of loans it may ask the commercial banks to keep special deposits with it.This is done to contract credit only.when special deposit are kept with the central bank the amount of money left with the commercial banks is reduced and this reduces their ability to give loans.
Answer:
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Administrative Procedure Act
Administrative Procedure Act is known to be united State federal statute that is majorly responsible for the administrative agency of the federal government of the united State to propose and establish regulations. This act can be applied to both independent agencies and federal executive departments.
Thus, this act is instituted to ensure that agencies keep the public informed of their organization, rules and provide for public participation in the rule-making process.