Economics 1022A/B Chapter Notes - Chapter 23: January 30

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ECON 1022A/B Full Course Notes
27
ECON 1022A/B Full Course Notes
Verified Note
27 documents

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Financial institutions and financial markets y we must distinguish between: finance and money, physical capital and financial capital. 22) the quantity of capital is fixed: an increase in the quantity of capital increases production possibilities and shifts the aggregate production function upward. Markets for financial capital y savings is the source of the funds that are used to finance investment, and these funds are supplied and demanded in three types of financial markets loan markets: bond markets, stock markets. accept deposits and use the funds to buy government bonds and other securities and to make loans. economists distinguish banks from other financial institutions because bank deposits are money: trust and loan companies. trust and loan companies provide similar services to banks and the largest of them are owned by banks. the accept deposits and make personal loans and mortgage loans. they also administer estates, trusts, and pension plans: credit unions and caisses populaires.