This is what I believe is the slope of the supply of loanable funds curve representing the risk of an increase in the interest rates of a loan.
The slope of the supply of loanable funds curve represents the risk of an increase in the interest rates of a loan.
I don’t know about you, but I can think of a time when the loan interest rate wasn’t high enough to warrant increasing the loan amount. (Think during the Great Depression.) Now that we’re in an economic recession, however, that risk is much more evident. The slope indicates the risk; the supply is the opposite.
This is a very useful tool to understand. The slope of the supply of loanable funds curve shows us that the interest rate is not always the same for the same loan amount, and so how we can use that information to make better decisions when it comes to applying for new loans.
We can use this information to make better decisions when it comes to applying for new loans. It’s been a frustrating time for borrowers applying for loans. The supply of loanable funds curve is low, but there’s still some available to us. Therefore, the cost of borrowing is higher than it should be. That means borrowers are choosing to apply for loans with higher loan amounts, thus increasing the risk they are taking on. We should consider this as a risk.
