Chapter 18 Part I -- Intro to Finance

by Elson Blunt on Jul 21, 2014

A brief introduction to the financial system, where borrowers and savers are linked up in a market for money itself, with the interest rate as the price of money. Borrowers want to invest (build capital), while the savers want to defer consumption and receive interest. If we assume that all savers are giving funds to borrowers, and all borrowers are investing those funds, then Savings = Investment, for the economy as a whole.

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