The logic of economics is not strict. Savings are the source of loans, and there is no loan. If banks are more efficient and can lend people 100% of their savings, then savings will wait.

In macroeconomics, the above situation is sometimes assumed. Suppose people's savings are the next loan.

Second, what is the money demand curve?

LM curve represents the trajectory of various income and interest rate combinations when money supply equals money demand in money market. The mathematical expression of LM curve is m=ky-hr, which can be expressed as the relationship between income y and interest rate r under the condition of satisfying the equilibrium of money market. The graph of this relationship is called LM curve. In addition, any point on this line represents some combination of interest rate and income. Under this combination, money demand and supply are equal, that is, the money market is balanced.

Introduction to LM curve:

The slope of (1) is positive, indicating that the LM curve is generally inclined to the upper right. Generally speaking, in the money market, the combination of income and interest rate on the right side of LM curve is an unbalanced combination of money demand greater than money supply; The combination of income and interest rate on the left side of LM curve is an unbalanced combination in which money demand is less than money supply. Only the combination of income and interest rate on LM curve is the balanced combination of money demand equal to money supply. (m=M/P, that is, the actual money supply is determined by the nominal money supply m and the price level p)

(2) The change of money supply will cause the LM curve to move to the right. When the money supply increases, the money demand should be equal to the supply and the demand should also increase; The premise of the increase of money demand is the increase of income or the decrease of interest rate. If the interest rate remains unchanged, the income will increase; If the income remains the same, the interest rate will fall. This means that the LM curve moves to the right.

(3) The change of price level will also lead to the shift of LM curve. Because the change of price level leads to the change of real money stock. An increase in the price level means a decrease in the actual amount of money, so the LM curve will move to the left, and vice versa.

Third, the book S in the loan supply curve says that it refers to savings or loan supply, but is it savings or loan supply? These two don't seem to be the same thing

Another manifestation of imprecise logic in economics. Here, let's understand them as one thing. Savings are the source of loans. Without people's savings, there would be no bank loans. If banks are more efficient and can lend people's savings 100%, then savings are equal to loan supply.

In macroeconomics, the above situation is sometimes assumed. Suppose people's savings are the next loan.

4. The S book in the loan supply curve says that it refers to savings or loan supply. ...

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