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16 Cards in this Set
- Front
- Back
Financial System |
The group of institutions in the economy that help to match one person's saving with another person's investment. |
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Financial Markets |
Financial institutions through which savers can directly provide funds to borrowers. |
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Bond |
A certificate of indebtedness. |
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Stock |
A claim to partial ownership in a firm. (Equity finance). |
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Financial Intermediaries |
Financial institutions through which savers can indirectly provide funds to borrowers. |
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Mutual Fund |
An institution that sells shares to the public and uses the proceeds to buy a portfolio of stocks and bonds. |
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National Saving (Saving) |
The total income in the economy that remains after paying for consumption and government services. |
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Private Saving |
The income that households have left after paying for taxes and consumption. S = Y - T - C |
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Public Saving |
The tax revenue that the government has left after paying for its spending. S = T - G |
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Budget Surplus |
An excess of tax revenue over government spending. |
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Budget Deficit |
A shortfall of tax revenue from government spending. |
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Market for Loanable Funds |
The market in which those who want to save supply funds and those who want to borrow to invest demand funds. |
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Policy 1: Saving Incentives |
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Policy 2: Investment Incentives |
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Policy 3: Government Budget Deficits and Surpluses |
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Crowding Out |
A decrease in investment that results from government borrowing. |