THE THEORY OF INTEREST

On Chart 34 are represented a number of W lines whichare assumed to depict Individual l’s varying degree ofimpatience at different income positions. A study of the

CHART 34

The Final Income Position (Qi) of Individual 1 Fixed by Tangency of the Wi Line to the Mi Line at Qi.

chart will show how Individual 1, in income position P uwill borrow, because his degree of impatience exceeds10 per cent, the market rate of interest. His borrowingwill continue, of course, until his degree of impatience is

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