What is the market cleaning?
Clearing Market is a phenomenon that occurs when supply and demand for something in perfect balance, so the market is cleaned, without excessive supply or unplanned demand. Some classic economists believed that the economies had inclined to the state of the market, but today access to the economy is a bit more complicated. Although this situation may occur, it is not necessarily common and can be influenced by a number of factors. In this case, the demand for loans is equal to the supply and the loan market is cleaned. Anyone who wants a loan gets one, and everyone who has an offer will be able to find a debtor to borrow.
In this case, the market is in a state of balance. However, the balance can be quickly thrown away. In the above example, for example, if 10,000 people wanted to be five percent loans and 10,000 wanted loans for four and a half percent, but the creditors were not willing to move, the market would not appear. Some people would remain a loan and creditors could not find enough debtors for their products.
prices can be used to control the market balance and can be intentionally used for this purpose. For example, if creditors want to tighten the credit market, they can raise interest rates. The demand for loans will be reduced because some people cannot afford or are not willing to pay a higher rate. On the contrary, reducing interest rates will increase demand and cause more people to borrow, because they consider low rates to be a good trade. In both cases, there is no market cleaning because even supply exceeds demand or demand overtaking supply.
Theorists who support the idea that the Clearing market is a nuns for the economy claims to be in the best interest of all to balance the economy. But this may not always be true. There may be cases in which people on one or the other can benefit from a lack of balance. For example, people who buy houses benefit when interest rates are low, forThis can get better loans, but interest rates are not low because it will not benefit creditors. As a result, interest rates tend to behave back and forth and rarely reach the point of balance where everyone wins.