Unit 5 Macro Section Review - Unit 5 Section Review#1-10 1 2 3 4 5 6 7 8 9 10 Level of investment spending 1000 850 100 = 50 million Private saving 1000

Unit 5 Macro Section Review - Unit 5 Section Review#1-10 1...

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Unit 5 Section Review (#1-10)1.Level of investment spending: 1000 - 850 - 100 = 50 millionPrivate saving: 1000 - 850 - 50 = 100 millionBudget balance: 50 - 100 = -50 millionRelationship: national savings = private savings + budget balanceNational savings is not equal to government transfers2.Which of the following are examples of investment spending, investing in financial assets, or investing in physical assets?3.Explain how a well functioning financial system increases savings and investment spending, holding the budget balance and any capital flows fixeda.investing in financial assetsb.investing in physical assetsc.investment spendingd.investment spendinge.investing in financial assetsa.reduces transaction costsb.reduces riskc.increases liquidity 4.Financial intermediaries - mutual funds, pension funds, life insurance companies and banks.Primary assets and how they facilitate- mutual funds use stocks; pension funds use financial assets; pension funds use financial assets; banks use loans
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  • Fall '16
  • Ross Graham
  • Macroeconomics, investment spending, local bank

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