Principles of Macroeconomics / Unit 2 MAC 0133 short lesson, about 20 seconds
What Shifts Saving and Borrowing
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The idea
Supply shifts with saving decisions, income and the return available elsewhere. Demand shifts with confidence about future returns and the ability to repay.
In practice
A collapse in business confidence shifts the demand for funds left.
Where people slip
Foreign savers are part of domestic supply, so a loss of their confidence shifts supply left and raises the rate.
Your place on the trail
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Builds on
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