Loanable funds model, fisher effect, and crowding out

Question 1

where do loanable funds come from?

Answer 1

excess reserves in the bank

Question 2

what are we graphing on the loanable funds model

Answer 2

borrowers and savers,, and supply and demand of loanable funds ( I think) Slf and Dlf

Question 3

what is crowding out?

Answer 3

when a government’s deficit spending, and borrowing to pay for that deficit spending, leads to higher real interest rates and less investment spending

Question 4

what is crowding in?

Answer 4

when the government decreases the deficit spending, which in turn lowers interest rates, this makes it cheaper for the private sector businesses to investment spend (more investment spending)

Question 5

what is the formula for the fisher effect

Answer 5

real int. + inflation rt. = nominal interest rate