Impact of stock market uncertainty

Reference no: EM131225851

Impact of Stock Market Uncertainty :

Consider a period in which stock prices are very high, such that investors begin to think that stocks are overvalued and their valuations are very uncertain.

If investors decide to move their money into much safer investments, how do you think this would affect general interest rate levels?

In your answer, use the loanable funds framework by explaining how the supply or demand for loanable funds would be affected by the investor actions, and how this force would affect interest rates.

Reference no: EM131225851

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