how is the channelling of funds from savers to, Finance Basics

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how is the channelling of funds from savers to

How is the channelling of funds from savers to spenders very important?

The channelling of funds by savers to spenders is very significant for two purposes:

• One, lender-savers (along with excess of accessible funds) does not often have profitable investment opportunities, whereas borrower-spenders have investment opportunities but lack of funds.

• Second, still for purposes other than investment opportunities into businesses, borrower-spenders may wish for invest into excess of their current income or to adjust the composition of their wealth (understanding of the preferences for recent versus future consumption).

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