PSYC 3420 Lecture Notes - Disposable And Discretionary Income, Savings Account, Financial Institution
7 Mar 2014
School
Department
Course
Professor
Document Summary
Finance is the term to describe the activity of providing the funds that finance expenditures on capital. Looks at how households and firms obtain and use financial resources and how they o cope with the risks that arise in this activity. Money is what we use to pays for goods and services and factors of production and to make financial transactions. Looks at how households and firms use money, how much of it do they hold, how banks o create and manage it and how its quantity influences the economy. Physical capital is the tools; instruments, machines, buildings and other items that have been produced in the past and that are used today to produce goods and services. o o. The funds that firms use to buy physical capital are called financial capital. The quantity of capital changes because of investment and depreciation. Investment increases the quantity of capital and depreciation decreases it.
