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he can borrow the shortfall from a bank. Banks and other financial institutions
make these individual differences between saving and investment possible by al-
lowing one person's saving to finance another person's investment.
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investment. How are they related?
THE MARKET FOR LOANABLE FUNDS
Having discussed some of the important financial institutions in our economy and
the macroeconomic role of these institutions,san jose sharks jerseys, we are ready to build a model of fi-
nancial markets. Our purpose in building this model is to explain how financial