Finance: banking industry
Real sector: working for pharmaceutical company. ( more money compared to finance)
Higher productivity= higher wages
Physical capital (inventory & material included )
-capital means financial capital commonly.
-Capital stock increases(new building will increase the capital stock ; to increase capital stock
you have to increase the investment)
-Net investment = Gross –Depreciation
-Gross investment is without considering depreciation.
Wealth & Saving
The value of all the things that people own (money, bonds, stocks, houses)
Saving ( The amount of income that is not paid in taxes or spent saving increases wealth.
Wealth is investment;
Saving increases the wealth*
Double your savings. If you make a dollar save a penny
The savings is used to finance investment ;
1. Loan markets (are used by individuals both by coroporations and governments)
(corporations and governments can sell bonds in the laon market)
2. Bond markets (business obtain the finance by selling bonds)
-Bonds are good investment especially govermnet bonds
-Corporations sell shares of stocks and raise money Stock market (i) primary market: where corporations issue shares they sell t