Summary of Model 2

Summary of Model #2

What does the grower's failure mean to this system?

Has this little economic system lost as a result of these transactions?

Transactions Summary
	Grower	Dealer	Bank	Total
Dollars	$ 0	$ 1,000	$ (1,000)	$ 0
Corn Seed	0 BU	-500 BU	0 BU	-500 BU

Balance Summary
	Grower	Dealer	Bank	Total
	Money
Beginning Balances	$ 0	$ 2,250	$ 1,250	$ 3,500
Ending Balances	$ 0	$ 3,250	$ 250	$ 3,500
Change	$ 0	$ 1,000	$ (1,000)	$ 0

	Corn Seed
Beginning Balances	0 BU	1200 BU	0 BU	1200 BU
Ending Balances	0 BU	700 BU	0 BU	700 BU
Change	0 BU	-500 BU	0 BU	-500 BU

Grower	Dealer	Bank	Total
Gained nothing; lost nothing.*	Gained by whatever accounting profit he made from the sale of the corn seed.	Lost $1,000 loaned to grower.	Whole system lost 500 BU of corn seed.

* Grower spent none of his own money for the corn he lost in his crop failure; thus, he lost nothing.

These figures summarize the results shown on the preceding pages. The system now has 500 bushels less without affecting the quantity of money.

Note: Although individuals must bear the losses, the whole system does suffer a loss. Regardless of who owned the lost goods, these three actors have 500 bushels less corn seed that they can use or trade amongst them.

See the details of model #2.