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Loanable funds theory of Interest was developed by:

A. Wicksell

B. Robert San

C. Ruskin

D. J.B.Say

Correct Answer : A.


Loanable funds theory of Interest? According to the Loanable Funds Theory of Interest, the rate of interest is calculated on the basis of demand and supply of loanable funds present in the capital market. The concept formulated by Knut Wicksell, the well-known Swedish economist, is among the most important economic theories. The Loanable Funds Theory of Interest advocates that both savings and investments are responsible for the determination of the rates of interest in the long run. On the other hand, short-term interest rates are calculated on the basis of the financial conditions of a particular economy. The determination of the interest rates in case of the Loanable Funds Theory of the Rate of Interest, depends essentially on the availability of loan amounts. The availability of such loan amounts is based on certain factors like the net increase in currency deposits, the amount of savings made, willingness to enhance cash balances and opportunities for the formation of fresh capitals.

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  3. In which case the elasticity shown by the different points of a curve is the same?
  4. The number of sellers in oligopoly is:
  5. The costs faced by the firm against variable factors are:
  6. The longer the period of time, the elasticity of supply will be:
  7. Diminishing returns occur when a firm:
  8. The short-run periods in monopolistic competition are:
  9. When a consumer is satisfied with his spending pattern, he is said to be in:
  10. Which of the following is called Gossens first law?
  11. Each firm in cournot model assumes that its competitor will:
  12. Which describes a competitive market?
  13. In monopolistic competition, the firm take advantage due to customers:
  14. Elasticity of supply means change in supply due to change in:
  15. The non-price competition cartel is a:
  16. Elasticity (E) expressed by the term, 1>E>0, is:
  17. The supply curve would probably shift to the right if:
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  19. The Prisoners Dilemma was presented by A.W.Tucker in:
  20. The horizontal demand curve for a commodity shows that its demand is:
  21. In modern theory of costs, a firm normally utilizes:
  22. Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:
  23. Increase in demand occurs when:
  24. The market demand for any commodity is the:
  25. If we measure the elasticity of demand with the help of the average and marginal revenue, the formula…
  26. Utility is a function of:
  27. If the commodity is inferior then Income Effect (I.E) is:
  28. The firms in non-cooperative games:
  29. In the case of an inferior good, the income effect:
  30. The amount of income left over for a consumer in equilibrium is :