Set at both ends of the node, the inflow and outflow of money are respectively Mg and Mx , the node has money stock is Mc（"Node" refers to the banks, consumers and companies through which money "flows"）
Mx=Mg+Mc
The formula means that the money that flows out of the node is equal to the currency that the node originally has and the currency that flows in. For example, if someone had $800 and received a $200 tip, then he had $1,000, and then he bought an iPhone for $1,000.
Mx>Mg+Mc
This situation means that the amount of money out from the node is greater than the sum of the original amount of money and the subsequent income of the node. In this case, for example, when the bank borrows too much money and the borrower cannot keep up with the repayment. This condition is equivalent to a human blood loss.
Mx
Muin Uddin Ahmed
Can you be any more specific? What assumptions are wrong?
Your assumptions are interesting, but you will need to revise them. Looking at 2008, the bank gave loans based on the clients' past financial records and their future projections; however, the real estate market crumbled...
Sampson Agyapong Atuahene
But why did the housing market collapse?Because the house prices are far too high, Consumer income (Mg) is less than the money to buy a house (Mx), consumers stop buying houses, so the market collapses. Here, or because of the size of the currency of the inflow node and the currency of the outflow node
Sampson Agyapong Atuahene
And banks also need to consider the variable of lenders giving up repayment
Sampson Agyapong Atuahene
So the banks also need to investigate the relationship between the income and the house price of the people who haven't bought a house, to see if they can afford to buy a house, which determines whether the real estate market will collapse.
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