22 lines
720 B
Markdown
22 lines
720 B
Markdown
<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-2-chapter-02 -->
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# Water-Pond Metaphor
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## Definition
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Smith's analogy comparing a well-functioning bank to a pond where water flows in and out at equal rates, maintaining a constant level. This illustrates how proper banking maintains steady circulation without requiring excessive reserves.
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## Source Chapter
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Book II, Chapter 2
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## Context
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Smith uses this metaphor to explain how a properly managed bank can maintain steady operations when its lending and repayments are balanced. The metaphor illustrates the ideal relationship between bank advances and repayments.
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## Economic Domain
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General Theory
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---
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