Oh man I'm really glad so many people jumped on my post, I'm looking forward to reading all of it and catching up and hopefully improving my grasp. At a glance though, this stuck out:
>...you take money out of the economy by saving it, the money in circulation goes down.
How do you take money out of the economy by saving it (unless it's under the mattress)? Banks make loans out of my savings, no? I thought a pretty common/basic macro identity was that savings = investment (or at least they are about equal and the same thing).
>...you take money out of the economy by saving it, the money in circulation goes down.
How do you take money out of the economy by saving it (unless it's under the mattress)? Banks make loans out of my savings, no? I thought a pretty common/basic macro identity was that savings = investment (or at least they are about equal and the same thing).