The quantity of loanable funds represents the total amount of money available to be borrowed or lent in financial markets. It includes both private savings and investments.
Related terms
Crowding Out Effect: Crowding out effect occurs when high government borrowing reduces the availability of loanable funds for private investment.
Investment: Investment refers to spending on capital goods, such as machinery and equipment, with the expectation that it will generate future income.
Capital Market: Capital market refers to a financial market where long-term securities like stocks and bonds are bought and sold.