A saver deposits funds with a bank. The bank then lends these funds to a borrower, who invests them in a productive project. After the project generates its returns, several transactions occur. Arrange the following events in the correct logical sequence.

In a simple economy, a saver deposits 100 units of grain in a bank. The bank lends these 100 units to a farmer for a one-period investment in a new crop, with the loan to be repaid after the harvest. Before the farmer's crop is harvested, the saver goes to the bank and demands the immediate withdrawal of their deposit. What is the fundamental problem the bank faces in this situation?

Calculating Final Consumption with a Financial Intermediary

In an economic model where a bank accepts a deposit from a saver and lends the funds to a borrower for a one-period investment project, what is the most direct financial consequence for the bank if the borrower's project yields zero return at the end of the period?

In an economic model featuring a saver, a borrower, and a bank, the borrower takes a loan from the bank to fund a one-period agricultural project. The project is successful, yielding a harvest greater than the initial investment. According to the standard sequence of financial obligations in such a model, which of the following actions must the borrower complete before calculating their own final consumption?

In a simple economic model where a bank intermediates between a saver and a borrower for a one-period investment, the amount of grain the saver can consume at the end of the period is directly dependent on the size of the borrower's harvest.

The Logic of Financial Repayment Flows

Components of Borrower's Final Consumption

In a simple economic model, a saver deposits funds in a bank. The bank lends these funds to a borrower for a productive project that yields a successful harvest. Match each financial component resulting from the harvest to the party that it represents or is owed to.

Distribution of Returns in a Bank-Intermediated Economy