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16 Cards in this Set
- Front
- Back
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Financial System |
the group of institutions in the economy that help to match one person's saving with another person's investment |
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Capital Investment |
The purchase of capital new capital which is considered investment in of macroeconomics. |
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Saving |
Putting money into financial markets, such as purchasing stocks or bonds, or putting money into financial intermediaries, such as depositing money into a bank or mutual fun |
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Investment |
Purchasing new capital, such as equipment or buildings |
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Credit Risk |
the probability that the borrower will fail to pay some of the interest or principal |
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Term of maturity |
the amount of time until the loan (bond) will be repaid (maturity) |
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Bonds |
A certificate of indebtedness |
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Stock |
A claim to partial ownership in a firm |
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Debt financing |
the sale of a bond |
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Equity financing |
the sale of a stock to raise money |
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National Saving |
The total income in the economy that remains after paying for consumption and government purchases |
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Private Saving |
the income that households have left after paying for taxes and consumption |
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Public Saving |
the tax revenue that the government has left after paying for its spending |
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Budget Surplus |
an excess of tax revenue over government spending |
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Budget Deficit |
a shortfall of tax revenue from government spending |
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Market for Loanable Funds |
the market in which those who want to save supply funds and those who want to borrow demand funds |
