ECO 1102 Lecture Notes - Lecture 7: Invisible Hand, Demand Curve, Real Interest Rate

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ECO 1102 Full Course Notes
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ECO 1102 Full Course Notes
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Chapter 8 - saving, investment, and the financial system. Reading: financial system: the group of institutions in the economy that help to match one person"s saving with another person"s investment, saving and investment = key of long-run economic growth. Saving a large portion of gdp, more resources are available for investment n capital and higher capital = higher productivity and living standard: examining financial systems. Large variety of institutions that make up the financial system. The relationship between the financial system and some key macroeconomic variable: saving and investment. Develop a model of the supply and demand for duns in finical markets. Interest rate is the price that adjusts to balance supply and demand. How various government policies affect the interest rate and therefore society"s allocation of resources. Financial institutions in the canadian economy: the financial system moves the economy resources from savers to borrowers. Savers: people who spend less than they earn.

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