Principles of Macroeconomics / Unit 15 MAC 1401 short lesson, about 20 seconds
Three Places the Money Can Come From
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The idea
When a government borrows more, the funds come from one of three places. Households can save more, firms can borrow and invest less, or the money can come from abroad. There is no fourth source.
In practice
Each of the three is a real change somewhere else in the economy.
Where people slip
The borrowing is not free of consequence, whichever source supplies it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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