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Demand for loanable funds
Wllingness of firms to borrow to engage in new investment projects
Supply of loanable funds
Willingness of households and government to save
Factors that shift demand:
Changes in the willingness of firms to invest
1. Rate of return on investment versus interest rate
2. Budget deficit
3. Technological change
4. Corporate taxes
Factors that shift supply:
1. Changes in the willingness of households and governments to save (households want to consume today, tax benefits for saving, etc)
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