week 3 - Local Government Bonds Financial Intermediaries o...

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Thursday 02:03 Chapter 26 Saving, Investment, and the Financial System What are the main types of financial institutions in the US economy and what  is their function What are the three kinds of saving WHats the difference between saving and investment Financial Institutions The  financial system o The group of institutions that helps match the saving of one person with  the invesment of another Financial markets o Institutions through which savers can directly provide funds to borrowers Bond market A bond is a certificate of indebtedness Stock Market A stock is a claim to partial ownership in a firm Municipal Bonds State Bonds
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Unformatted text preview: Local Government Bonds Financial Intermediaries o Institutions through which savers can indirectly provide funds to borrowers Banks Mutual Funds Private Saving o The portion of households income that is not used for consumption or paying taxes 2. I is determined by supply and demand of loanable funds 3. National Saving = Private + Public Saving Budget Deficits and Surpluses Budget Surplus o An excess of tax revenue over government spending o T-G o Public saving Budget Deficit o A shortfall of tax revenue from government spending o G- T o (public saving) o 02:03 02:03...
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week 3 - Local Government Bonds Financial Intermediaries o...

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