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13 Cards in this Set
- Front
- Back
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Financial System
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Consists of those institutes in the economy that help to match one person's savings with another persons investment
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Financial Markets
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The institutions through which a person who wants to save can directly supply funds to a person who wants to borrow
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Bond
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Certificate of indebtedness that specifies the obligations of the borrower to the holder of the bond
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Credit Risk
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Probability the borrow wont pay interest
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Junk Bonds
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Low credit companies offer very high interest bonds
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Stock
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represents ownership in a firm
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Financial Intermediaries
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Financial institution through which savers can indirectly provide funds to borrowers
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Mutual Funds
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An institutions that sells shares to the public and uses proceeds to buy a selection or portfolio of various types of stocks, bonds, or both
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Private Saving
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The amount of income that households have left after paying their taxes and consumptions
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Public Saving
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The amount of tax revenue that the government has left after paying for its spending
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Budget surplus
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Receives more money than it spends
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Budget Deficit
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government spends more than it receives
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Market for loanable funds
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the market which thsoe who want to supply funds and those who want to borrow to invest demand funds
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