Micro15 - Microeconomics Dr.Safarzadeh Chapter15

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Microeconomics Chapter 15 Dr. Safarzadeh
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Chapter 15:   Investment, Time, and Capital Markets Capital can be rented or purchased.  If purchased , capital  expenditure happens to day but the revenues accrue in the  future. Main Question of this chapter:    How much are future       profits worth today? Capital market is different from labor and raw material  market in that capital is durable.  It lasts for years and  contributes to production. Capital Market
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Chapter 15:   Investment, Time, and Capital Markets Some Definitions: Flow variable :   Expressed in unit of time.  Income or  revenue from operation of capital is flow variable.   Stock Variable :  A value at a given time (wealth).                Investment:   Purchase of Capital Goods  Financial Investment:     Liquidity:   Speed with which an asset can be  transformed into money.  
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Chapter 15:   Investment, Time, and Capital Markets   What is Interest Rate?   Price of Money  Types of Interest Rate:   Many Different Types.  They   Generally Move Together  Interest Rate as a Fundamental Economic Variable   Investment Decisions What Determines Interest Rate? Money market:   Demand and Supply of Money    Spending Decisions on Big Items    A Tool of Monetary Policy
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Chapter 15:   Investment, Time, and Capital Markets Investment:   Purchase of Capital Goods  Financial Investment:     Demand for Money:   M1 Definition of Money (Demand for Money)  M1 =  Currency + Demand Deposits  (Checkable Accounts)  M2 =  M1 + Saving Accounts  (Time Deposits)  + Money  Market Accounts
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Chapter 15:  
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This note was uploaded on 11/11/2011 for the course ECON 100 taught by Professor Chandle during the Spring '11 term at UC Irvine.

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Micro15 - Microeconomics Dr.Safarzadeh Chapter15

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