Capitalist


The capitalist has obtained money, either in the form of wages, entrepreneurial profit, or interest. He has not used all of his money for consumption and hence added more to the market than he has withdrawn from it. He has hence contributed to an increase in the stock of factors of production available in the market and generated savings.

He identifies entrepreneurs who are demanding present money in order to purchase factors of production (from other entrepreneurs) in exchange for future money. He enters into a credit transaction with these entrepreneurs if the future money offered in exchange corresponds with his time preference.

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