Question

What does it mean when we say that individuals as a group are net suppliers of funds for financial​ institutions? What do you think the consequences might be in financial markets if individuals consumed more of their incomes and thereby reduced the supply of funds available to financial​ institutions?

Answer 1

Answer:

Individuals, as a whole, spend less than they make. The excess is provided for financial institutions.

Explanation:

In any market, the cost determines what providers get and what demanders pay. In money related markets, the individuals who supply monetary capital through sparing hope to get a pace of return, while the individuals who request budgetary capital by accepting assets hope to pay a speed of performance. This pace of recovery can arrive in an assortment of structures, contingent upon the kind of speculation.

Members in budgetary markets must choose when they want to devour merchandise: presently or later on. Financial experts call this essential intertemporal leadership since it includes choices crosswise over time.