ECON 105 Chapter 8-13: ECON 105 - Principles of Macroeconomics, 4th Canadian Edition - Chapters 8-13

• School: Simon Fraser University
• Department: Economics
• Course: ECON 105
• Professor: Junjie Liu

Document Summary

Chapter 8 saving, investment, and the financial system financial system institutions in the economy that help to match one person"s saving with another person"s investment. Country"s saved large portion of gdp = more resources available for investment in capital = higher capital = higher country productivity and living standard. Financial institutions in the canadian economy financial system moves scarce resources from savers (people who spend less than they earn) to borrowers( people who spend more than they earn) Savers save to put child through post-secondary school, or retire: supply money and expect to get interest back later. Borrowers borrow to buy house, or start a business: borrow money and required to pay interest later. Financial markets financial markets institutions through which savers can directly provide funds to borrowers. The bond market: bond a certificate of indebtedness. Specifies the obligations of the borrower to the holder of the bond (iou)