The Credit market is termed to be a market that equilibrates the surplus and deficit economic units of funds, through the provision of either Loan or Equity finance. Parties involved are:
• Banks (Financial Intermediaries)
• Investors (suppliers of capital)
In order to outline the credit market equilibrium in the general context of this study it is essential to understand the features within its environment and how the interplay of these features drive the market to equilibrium.
Monetarists favour cutting welfare payments and making the criteria for receiving the, more rigorous. They believe that this would reduce voluntary unemployment by, as with a cut in income tax, increasing the gap between paid employment and unemployment benefit and ensuring that those who do receive benefits are genuinely unable to find work. It is thought that if employment benefit is at a relatively low level the unemployed will seek work more actively and be less inclined to turn down offers of low paid employment. Unfortunately the last conservative government did not stay in power long enough to undo the damage done by the previous government in this respect as their policies had developed a % of the population completely dependant on government handouts and quite willing to sit back and do nothing . This had a plus side in keeping inflation down...
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