ECON 2000 Lecture Notes - Lecture 3: Opportunity Cost, Fractional-Reserve Banking, Nominal Interest Rate
27 Sep 2016
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Document Summary
Financial system moves money from savers to borrowers: households borrow to finance for purchases, firm borrow for expansion and upgrade, government borrow for to build road, building and for tax deficits. Canada"s financial system ranked as the soundest in the world: 5 largest banks: Office of the superintendent of financial institutions (ofsi) primary regulator of banks. Banks are large national banks are not affected by a problem in one region. Conservative banking don"t rely on risky investment practices. Network of banks, stock and bond markets and other financial markets and institutions that make it possible for funds to flow from lenders to borrowers. Well developed system leads to rapid economic growth. Asset anything of value owned by a person or firm. Financial asset financial claim on someone to pay you money: ex: bank chequing account right to claim money equal to your account value.
