The book is easy to understand with a little story to illustrate what the economy is, why growth.
capital
People are not the beginning of any capital, no savings, the number of daily output, consumption (eating) how much. No balance.
The first person improves productivity by adventure (self-sacrifice, a day without eating) made a tool (equipment).
This device is the capital.
Save
The first person with the balance, the balance of savings products up (until later use).
So how can this person deal with his savings it? There are five ways:
- save
- Consumed
- Take out
- Investment (creating a stronger capital)
Of course, save up and consumed without any increase his savings, and now if he does not perform work, then he will one day be depleted savings.
But if he borrowed the money out, pay back the money when other people will take interest, then his savings can grow.
If some of his longer-term perspective, to come up with savings to invest some capital, so he will get even more products, savings can be even greater.
produce
There are so many words I remember in junior high school textbooks on politics: production decisions consumption.
This sentence is not explained in detail, you can search on their own.
consumption
Consumer stimulate production.
Consumption is a measure of the scale of production. If the product is useful to people's lives, and the price is within reasonable limits, then I am sure you will buy, otherwise nobody cares.
interest rate
If society saving more, then your money in the bank deposit interest rates relatively low, because others are rich, very few people will get to borrow capital.
Conversely, if the social savings is relatively small, then there will be a lot of people to borrow money, then interest rates will naturally rise.
And in most countries, they are controlled interest rates to control people's willingness to save.
Debit and credit
Borrowing, so that people can not venture without saving situation (do not eat) and access to capital. But the cost of capital after the acquisition to increase productivity, savings to give a portion of borrowers.
Borrowing a premise that social savings is enough.
Xiaoyang students cloud
Earlier chapters of this book, as we unravel the mysterious veil economy, and explores how the economy is growing.
In later chapters, we focus on how the US economy is the collapse of play.
We hope that through this book, understand economics, love of money in a proper way.
Recommendation : 5 stars
ps：
Colleagues recommended a book: "Rich Dad, Poor Dad" (have not seen, ready to enter the pit)
