qualify for government checks after retirement, has tended to reduce the quantity of financial capital that

workers save. If this is true, Social Security has shifted the supply of financial capital at any interest rate to the

left.

By contrast, many college students need money today when their income is low (or nonexistent) to pay their

college expenses. As a result, they borrow today and demand from financial markets. Once they graduate and

become employed, they will pay back the loans. Individuals borrow money to purchase homes or cars. A

business seeks financial investment so that it has the funds to build a factory or invest in a research and

development project that will not pay off for five years, ten years, or even more. Thus, when consumers and
businesses have greater confidence that they will be able to repay in the future, the quantity demanded of
financial capital at any given interest rate will shift to the right.
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