AP ECONOMICS: November 8 AP Economics Learning Target In order to have a better understanding of how financial markets work, I will learn how the loanable funds (LF) market determines the real interest rate. I will know I have it when I can: (1) draw a correctly labeled LF market graph; (2) explain how the supply and demand for LF changes; and (3) explain the differences between the money market and the LF market. --warm-up: how does savings contribute to business investment in capital with resulting economic growth? --begin the Loanable Funds (LF) Market -market where real interest rate is derived—savings and investment decisions are calculated based on some level of inflationary expectation -changes in borrowing (DLF)—examples -changes in savings (SLF)—examples Closure: begin Worksheet 29.2 (HO) (Note: y-axis in the Money Market vs. in the LF Market) Assignment: --watch videos at Mr. Clifford’s web site (AC-DC Economics)