to turn it around,
who decides the elasticity of the credit system built on top of the fixed layer?
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The individuals/businesses demanding credit and those willing to finance it. Similar to how anything is supplied, credit is simply a tool that has a market price based off supply and demand, and the price for credit is interest rates. Which naturally would vary location to location and based on how creditors view the riskiness of debtors. Supply of credit also should vary constantly as risks and conditions constantly change