COMMERCE 1E03 Study Guide - Midterm Guide: Loanable Funds, Frictional Unemployment, Virtuous Circle And Vicious Circle
2 Mar 2016
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Chapter 8 saving, investment, and the financial system. Financial system: the group of institutions in the economy that help to match one person"s saving with another person"s investment. Financial markets: financial institutions through which savers can directly provide funds to borrowers. Stock: a claim to partial ownership in a firm. Financial intermediaries: financial institutions through which savers can indirectly provide funds to borrowers. Mutual fund: an institution that sells shares to the public, and uses the proceeds to buy a portfolio of stocks and bonds. Gross domestic product (gdp): y (gdp) = c (consumption) + i (investment) + g (government purchases) + nx (net exports) National saving (saving): the total income in the economy that remains after paying for consumption and government purchases. Private saving: the income that households have left after paying for taxes and consumption. Public saving: the tax revenue that the government has left after paying for its spending.
