Channelling of funds from savers to spenders important, Finance Basics

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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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