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22 Cards in this Set

  • Front
  • Back
how do you calculate savings?
income - spending on needs
how do you calculate savings rate?
savings/income
how do you calculate wealth
assets - liabilities
what is the difference between a stock and a flow?
a flow is defined per unit of time and a stock is a measurement taken at a point in time
how are stocks and flows related?
a flow is a rate of change in stocks
what is a capital gain?
it is an increase in the value of an existing asset
what is a capital loss?
a decrease in the value of an existing asset
what kind of saving is for:
"retirement or the purchase of a home?"
life-cycle saving
what kind of saving is for:
"to protect against unexpected setbacks?"
precautionary saving
what kind of saving is for:
"the purpose of leaving an inheritance?"
bequest saving
what is a capital gain?
it is an increase in the value of an existing asset
what is a capital loss?
a decrease in the value of an existing asset
what kind of saving is for:
"retirement or the purchase of a home?"
life-cycle saving
what kind of saving is for:
"to protect against unexpected setbacks?"
precautionary saving
what kind of saving is for:
"the purpose of leaving an inheritance?"
bequest saving
how is the real interest rate related to savings?
real interest rate is like a reward for saving due to the amount of income they accumlate from interest
how is national saving measured?
GDP - consumption expenditure - governmen tpurchases
in national saving, what is GDP?
income
in national saving, what is "spending on current needs?"
consumption expenditure and government purchases
what determines the # of loanable funds?
national savings
what causes investment aka demand for savings to shift?
- introduction of new technology causes investment to shift out because marginal product increases and it makes investing more attractive
what causes the supply of savings to shift?
- if national savings decrease
ex: private sector saves less or if the government decides to spend more (public savings = T-G), if G goes up and T stays the same, then public savings decrease which decreases national savings