THE THEORY OF INTEREST

Willingness line, Pi Wi IV , is not a straight line like Pi M tin Chart 26, but a curved line. The steepness of eachstep, or ratio of risers to tread, or slope of the curvesshows the degree of impatience at that particular step.

The Willingness line through P j extends, of course,in both directions. It shows not only on what terms In-dividual 1 would be willing to borrow, but also on whatterms he would be willing to lend. At point P i, he iswilling to lend the first $100 at 40 per cent, a second, at50 per cent, and so on. Everyone theoretically is readyeither to borrow or to lend according to the terms. In-dividual 1 is here represented as barely willing at P xeither to borrow $100 at 30 per cent, or to lend $100 at 40per cent. In short, he would be willing to substitute thecombination represented by any given point on his Wil-lingness line for the combination represented by anyother point on the same line. All points on that line are,by hypothesis, equally desirable to. Individual 1. Eachsegment of the Willingness line, by the divergence of itsslope from 100 per cent, shows the degree of impatienceat the particular income position there represented.

Consequently, P x W x might be called an Impatienceline quite as well as a Willingness line 3 for Individual 1.There would be another Willingness line, or W line, forany other individual. The W lines thus differ from theMarket, or M, lines which are common to everybody inthe market.

§5. The Two Lines Compared

The M line of Chart 26 and the W line of Chart 27 arebrought together in Chart 28. From P x we have a pair of

'The latter name was chosen chiefly because the initial “W,” forwillingness, is more convenient to use in the chart than the letter “I,”especially as “I” is the initial also of interest and income.

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