Economics Chapter 12
Terms
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- the absence of spending
- saving
- the dollars that become available when people abstain from consumption
- savings
- a network of savers, investors, and financial institutions that work together and transfer savings to investors
- financial system
- claims on property and the income of the borrower
- financial asset
- financial institutions that lend the funds that savers provide to borrowers
- financial intermediary
- nondepository institutions that channel savings to borrowers
- nonbank financial intermediary
- examples of financial intermediary
- life insurance companies, depository
- examples of nonbank intermediary
- real estate investments, finance companies
- the outcome is not certain but probabilities can be estimated
- risk
- amount borrowed when getting a loan or issuing a bond
- principal
- formal contract to repay borrowed money and interest on the borrowed money at regular future intervals
- bonds
- loans investors make to financial institutions
- certificate of deposits
- the distribution of money amoung investors
- diversification
- the person that buys stocks and shares
- stocbroker
- statistical series of 30 representaive stocks used to monitor price changes on the New York Stock Exchange
- Dow-Jones Industrial Average
- statistical series of 500 stocks used to monitor prices on the NYSE, American Stock Exchange, and OTC market
- Standard & Poors 500
- system with some government involvement
- modified free enterprise conomy
- conversion of state-owned factories
- privatization