Chapter 10 Vocabulary
Economics 201 with Stegner at Idaho State University
About this deck
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis
Sign up (free) to study this.
Savings-Investment Spending Identity
savings and investment spending are always equal for the economy as a whole
Budget Surplus
the difference between tax revenue and government spending when tax revenue exceeds government spending
Budget Balance
the difference between tax revenue and government spending
National Savings
the sum of private savings and the budget balance, is the total amount of savings generated within the economy
Capital Inflow
the net inflow of funds into a country
Loanable Funds Market
is a hypothetical market that illustrates the market outcome of the demand for funds generated by borrowers and the supply of funds provided by lenders
Interest Rate
is the price, calculated as a percentage of the amount borrowed, charged by lenders to borrowers for the use of their savings for one year
Rate of Return
on a project is the profit earned on the project expressed as a percentage of its cost
Crowding Out
occurs when a government deficit drives up the interest rate and leads to reduced investment spending
Fisher Effect
an increase in expected future inflation drives up the nominal interest rate, leaving the expected real interest rate unchanged
Wealth
is the value of a household's accumulated savings
Financial Asset
a paper claim that entitles the buyer to future income from the seller
Physical Asset
a claim on a tangible object that gives the owner the right to dispose of the object as he or she wishes
Liability
a requirement to pay income in the future
Transaction Costs
the expenses of negotiating and executing a deal
Financial Risk
uncertainty about future outcomes that involve financial losses and gains
Diversification
investing in several different things so that the possible losses are independent events
Liquid
an asset that can be quickly converted into cash without much loss of value
Illiquid
an asset that can't be quickly converted into cash without much loss of value
Loan
a lending agreement between an individual lender and an individual borrower
Default
occurs when a borrower fails to make payments as specified by the loan or bond contract
Loan-Backed Security
an asset created by pooling individual loans and selling shares in that pool
Financial Intermediary
an institution that transforms the funds it gathers from many individuals into financial assets
Mutual Fund
financial intermediary that creates a stock portfolio and then resells shares of this portfolio to individual investors
Pension Fund
a type of mutual fund that holds assets in order to provide retirement income to its members
Life Insurance Company
sells policies that guarantee a payment to a policy holder's beneficiaries when the policy holder dies
Bank Deposit
a claim on a bank that obliges the bank to give the depositor his or her cash when demanded
Bank
a financial intermediary that provides liquid assets in the form of bank deposits to lenders and uses those funds to finance the illiquid investment spending needs of borrowers
Efficient Markets Hypothesis
asset prices embody all publicly available information
Random Walk
the movement over time of an unpredictable variable
About this deck
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
Dennis