THE THEORY OF INTEREST

sumed fixed income situation of Individual 1, and to drawthrough this point P 1 two lines, one a straight line, theMarket line, showing the direction in which Individual 1can move away from P u and the other a curved line, theWillingness line, showing the direction in which he isvnlling to move. He is willing to borrow a first $100 at30 per cent, or lend a first $100 at 40 per cent, but cando either at 10 per cent.

§6. The Whole Family of Market Lines

But before we make use of the contrast between theM and W lines to follow the individual as he moveshis income position from P a either northwest as a lender

This Year's Income

CHART 29

Intersection of M, Line and Wi Line at Pi.

or southeast as a borrower, we must first complete ourpictures of the two kinds of lines. Thus far only one lineof each of the two kinds has been drawn. These are the

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