Summary of Model 3

Summary of Model #3

This summary shows that, similar to the first model, the system as a whole does benefit as a result of this transaction.

Has this little economic system benefited from these transactions?

Transactions Summary
	Grower	Dealer	Bank	Total
Dollars	$ 325	$ (500)	$ 175	$ 0
Corn Seed	900 BU	300 BU	0 BU	1200 BU

Balance Summary
	Grower	Dealer	Bank	Total
	Money
Beginning Balances	$ 0	$ 2,250	$ 1,250	$ 3,500
Ending Balances	$ 325	$ 1,750	$ 1,425	$ 3,500
Change	$ 325	$ (500)	$ 175	$ 0

	Corn Seed
Beginning Balances	0 BU	1200 BU	0 BU	1200 BU
Ending Balances	900 BU	1500 BU	0 BU	2400 BU
Change	900 BU	300 BU	0 BU	1200 BU

Grower	Dealer	Bank	Total
Gained $325 plus 900 BU of corn seed.	Gained by the market value of 300 BU of seed less $500*	Gained $175 interest income.	Whole system gained by 1200 BU of corn seed.

*Corn sold for $1,000 less corn bought for $1,500.

The ownership of cash balances has changed. The quantity of money, however, although it expanded while the grower's loan remained outstanding, has return to the beginning level. But, the system has prospered. The amount of corn seed has increased by 1,200 bushels.

Note: Remember, as I pointed out in model #1, ownership of the corn seed remains in the hand of individuals. The 1,200 bushel increase for all owners simply indicates that as one individual gains the system gains.

The quantity of money, since no additional loans have been made, returns to the same level at the end as existed in the beginning. The system does, however, have 1,200 more bushels of corn at the end of this period of time than it had at the beginning.

Let's look at the detailed figures from model #3.