Financial Markets

Deficit Units

Consumption + Investment > Income 
=> engage in debt, become a borrower 
 
=> negative NAFA -> deficit unit 
 
s - i < 0 -> NAFA < 0 -> deficit unit
 
Being a deficit unit does not necessarily mean being a borrower, since the deficit unit can use their accumulated wealth to finance consumption of investments 
 
Interest for borrowers:
- min. costs
- max. period

Diskussion