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However this technique of expansion can’t go on indefinitely because the excess reserves with the banks come to an finish which forces the banks to not give further loans for funding, while demand for financial institution credit goes on rising. Thus, the inelastic supply of credit from the banks and mounting demand for it as a result of the cash fee of interest to go above the natural fee of curiosity.
THE aftermath of the 2007-08 monetary crisis must have been a moment of triumph for economics. Lessons realized from the 1930s prevented the collapse of world finance and commerce, and resulted … Read More...