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Loanable funds theory

Unit 2: Financial Instruments and Interest RatesTopic 2 of 4
Browse the Foundation of Financial Systems syllabus

Foundation of Financial Systems

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What the syllabus expects

  • Supply and demand of loanable funds
  • Equilibrium interest rate
  • Factors affecting interest rates

Loanable funds theory

Bachelor of Business Studies (BBS) — Third Year

Subject: Foundation of Financial Systems (MGT 226)

Unit 2: Financial Instruments and Interest Rates

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

  • Explain the scope and key elements of loanable funds theory.
  • Explain the financial-system relationships and interpret their roles using clearly identified institutional and reporting contexts.

Curriculum Scope

  • Supply and demand of loanable funds
  • Equilibrium interest rate
  • Factors affecting interest rates

Detailed Microsyllabus

  1. Loanable funds

    1. Sources of supply and demand.
    2. Equilibrium interest rate.
    3. Shifts and adjustments.

  2. Influencing factors

    1. Saving, investment and financing conditions.
    2. Policy and market changes.
    3. Use a labeled diagram and state the theory's assumptions.

Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 60–62.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Nepalese current-status discussions should identify the reporting period and use dated official publications, such as Nepal Rastra Bank reports, rather than undated figures.