Mini Midterm (Ch. 26) Flashcards Preview

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Flashcards in Mini Midterm (Ch. 26) Deck (13)
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1

Financial systems

the group of institutions in the economy that help to match one person’s saving with another person’s investment

2

Financial markets

financial institutions through which savers can directly provide funds to borrowers

3

Bond

a certificate of indebtedness

4

Stock

a claim to partial ownership in a firm

5

Financial intermediaries

financial institutions through which savers can indirectly provide funds to borrowers

6

Mutual fund

an institution that sells shares to the public and uses the proceeds to buy a portfolio of stocks and bonds

7

National saving

the total income in the economy that remains after paying for consumption and government purchases

8

Private saving

the income that households have left after paying for taxes and consumption

9

Public saving

the tax revenue that the government has left after paying for its spending

10

Budget surplus

an excess of tax revenue over government spending

11

Budget deficit

a shortfall of tax revenue from government spending

12

Market for loanable funds

the market in which those who want to save supply funds and those who want to borrow to invest demand funds

13

Crowding out

a decrease in investment that results from government borrowing