Credit

A credit is an action that involves two parties where one party agrees to surrendering the immediate ownership of a good while the other party agrees to surrendering the future ownership of a good and the former is exchanged for the latter. It occurs only when each party assigns a higher time preference to what he obtains versus what he surrenders. Otherwise both parties, or at least one of the parties would not be impelled to enter into the credit transaction.

Leave a Reply

Your email address will not be published. Required fields are marked *

 

Subscribe without commenting