Principles of Economics- Mankiw (5th) 535

Principles of Economics- Mankiw (5th) 535 - forecasts, as...

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IN THIS CHAPTER YOU WILL . . . Consider how government budget deficits affect the U.S. economy Develop a model of the supply and demand for loanable funds in financial markets Learn about some of the important financial institutions in the U.S. economy Consider how the financial system is related to key macroeconomic variables Use the loanable- funds model to analyze various government policies Imagine that you have just graduated from college (with a degree in economics, of course) and you decide to start your own business—an economic forecasting firm. Before you make any money selling your forecasts, you have to incur substantial costs to set up your business. You have to buy computers with which to make your
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Unformatted text preview: forecasts, as well as desks, chairs, and filing cabinets to furnish your new office. Each of these items is a type of capital that your firm will use to produce and sell its services. How do you obtain the funds to invest in these capital goods? Perhaps you are able to pay for them out of your past savings. More likely, however, like most en-trepreneurs, you do not have enough money of your own to finance the start of your business. As a result, you have to get the money you need from other sources. S A V I N G , I N V E S T M E N T , A N D T H E F I N A N C I A L S Y S T E M 553...
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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