The most important savings surplus unit in the economy is
the savings of individuals
Capital formation
creation of physical productive facilities
Mortgages
is the most important instrument used to raise funds in the credit makers
Major factors which influence the level of savings are the level of
income, economic expectations, cyclical influence and the life stage of the individual saver
Greater potential savings would result from a(n)
Shift to more middle aged families
Early developments in transportation were ultimately financed by
Savings of individuals
Financial assets include all except which of the following
Productive facilities
Which one of the following four basic economic units consistently represents a savings surplus
individuals
Which of the following factors usually influence a person's choice of savings medium
liquidity, degree of safety , return
Savings surplus unit
individuals
Savings deficit unit
business, government
The most liquid form of savings
cash balances
Indirect financing
business bank loans
Voluntary and contractual savings
accumulation of cash and other financial assets
Capital consumption allowances
are estimates of depreciation of plant and equipment assets for business purposes.
Savings deficits occurs
when investments in real assets exceeds current income.
Savings surplus occurs
when an economic unit has current income that exceeds its direct investment in real assets
Real assets
direct ownership of land, buildings, machinery, inventory, commodities and precious metals
Economic Cycle
when the economy is growing individuals save more and vise versa
Business Cycles , inflation, interest rates also have an effect on savings
Gross investment equals
gross savings
Finance is founded on six principles
1.Money has a time value
2.Higher returns are expected for taking on more risk
3.financial markets are efficient in pricing
4.Reputation matters
5.risks verses returns
6.individuals reputations reflects his ethical behavior.
The core of the Federal Reserve system is the
Board of Governors
Part of the Fed responsible for changing the discount rate are
Board of Governors and Open market committee
The federal reserve bank created
a central bank
Monetary policy
formulate by the FED to regulate money supply
Dynamic actions
FED actions that
Finance
study of how individuals, institutions, government and business acquire, spend and manage financial resources
Why study finance
make informed decisions, personal and business investment decisions and career decisions
Basic requirements of an effective financial system
Policy Makers
Monetary System
financial institutions
financial markers
Depository system
a financial institutions in the U.S that is legally allowed to accept monetary deposits from consumers. banks, credit unions and savings and loans assocations
Non-Depository system
a company that deals in financial instruments but does not accept deposits. insurance companies, brokerage firms
Functions of money
medium of exchange, store of purchasing power and standard of value
Thrift depository
provide safe depositories for individual saver
National Banking act of 1864
made possible the chartering of banks by the federal government
Commercial banks obtain the bulk of their loanable funds from
depositors
The creation of the federal reserve system and central banking was long in coming compared to other industrialized nations because
of the general opposition to a strong central banking system
A central bank serves the nation
by influencing the cost, availability and supply of money
Reserves banks are responsible for
more than 90% of all currency in circulation
the federal reserve board is responsible for
establishing margin requirements on the stock market credit
capital stock of each federal bank
is owned by the member banks
the fed spends most of it time and effort on
activities described as defensive
FED carries out its operations through its open market committee
because public announcement is not required
Organization structure of the FED
Board of Governors
Federal Reserve Banks
FOMC
Advisory Committee
Member banks
Functions of the FED 1
Board of Governors determine reserve requirements, responsible for changing the discount rate, supervising and regulating member banks and bank holding companies. Establishing and administering consumer protection regulations and over seeing the federal r
Functions of the FED 2
Federal Reserve Banks
(12 Districts)
Propose discount rates.
hold reserve balances for depository institutions and lend to them at discount window.
Furnish Currency
collect, clear checks and transfer funds
handle government debt and cash balances
Functions of the FED 3
FOMC(Board of Governors and 5 Reserve Banks)
chiefly responsible for Monetary Policy
directs open market operations (buying and selling government securities)
Functions of the FED 4
Advisory committee
Consumer advisory council
Federal advisory council
Thrift institutions advisory council
Largest savings are
Personal savings
Personal Consumption expenditures
expenditures by individuals for durable goods
Finance companies
provide loans directly to consumers and business
Intermediation
is the accumulation of lending and savings by depository intuitions
Corporate savings for short term
working capitals purpose is the most important reason for business accumulating financial assets
Corporate savings for long term
save for major construction, equipment ,maintenance and repairs
Stages of a saver
formative/edu (do not save)
career/family (little saving)
wealth building stage (saves the most)
Retirement (spend the most)
Lender of last resort
Elastic currency
Banking reform passed
1933 & 1935
significant change in the banking reform
separation of commercial and investment banking
underlying need for a stronger central bank was apparent during
the great depression
FED's ability to influence economics stability stems from
ability to influence the availability and cost of money and credit
As chief banker the FED
Clears Treasury checks
Open market operations are executed by
The federal reserve bank of NY
Discount window
a lending facility where depository institutions can borrow from the FED
The most important savings surplus unit in the economy is
the savings of individuals
Capital formation
creation of physical productive facilities
Mortgages
is the most important instrument used to raise funds in the credit makers
Major factors which influence the level of savings are the level of
income, economic expectations, cyclical influence and the life stage of the individual saver
Greater potential savings would result from a(n)
Shift to more middle aged families
Early developments in transportation were ultimately financed by
Savings of individuals
Financial assets include all except which of the following
Productive facilities
Which one of the following four basic economic units consistently represents a savings surplus
individuals
Which of the following factors usually influence a person's choice of savings medium
liquidity, degree of safety , return
Savings surplus unit
individuals
Savings deficit unit
business, government
The most liquid form of savings
cash balances
Indirect financing
business bank loans
Voluntary and contractual savings
accumulation of cash and other financial assets
Capital consumption allowances
are estimates of depreciation of plant and equipment assets for business purposes.
Savings deficits occurs
when investments in real assets exceeds current income.
Savings surplus occurs
when an economic unit has current income that exceeds its direct investment in real assets
Real assets
direct ownership of land, buildings, machinery, inventory, commodities and precious metals
Economic Cycle
when the economy is growing individuals save more and vise versa
Business Cycles , inflation, interest rates also have an effect on savings
Gross investment equals
gross savings
Finance is founded on six principles
1.Money has a time value
2.Higher returns are expected for taking on more risk
3.financial markets are efficient in pricing
4.Reputation matters
5.risks verses returns
6.individuals reputations reflects his ethical behavior.
The core of the Federal Reserve system is the
Board of Governors
Part of the Fed responsible for changing the discount rate are
Board of Governors and Open market committee
The federal reserve bank created
a central bank
Monetary policy
formulate by the FED to regulate money supply
Dynamic actions
FED actions that
Finance
study of how individuals, institutions, government and business acquire, spend and manage financial resources
Why study finance
make informed decisions, personal and business investment decisions and career decisions
Basic requirements of an effective financial system
Policy Makers
Monetary System
financial institutions
financial markers
Depository system
a financial institutions in the U.S that is legally allowed to accept monetary deposits from consumers. banks, credit unions and savings and loans assocations
Non-Depository system
a company that deals in financial instruments but does not accept deposits. insurance companies, brokerage firms
Functions of money
medium of exchange, store of purchasing power and standard of value
Thrift depository
provide safe depositories for individual saver
National Banking act of 1864
made possible the chartering of banks by the federal government
Commercial banks obtain the bulk of their loanable funds from
depositors
The creation of the federal reserve system and central banking was long in coming compared to other industrialized nations because
of the general opposition to a strong central banking system
A central bank serves the nation
by influencing the cost, availability and supply of money
Reserves banks are responsible for
more than 90% of all currency in circulation
the federal reserve board is responsible for
establishing margin requirements on the stock market credit
capital stock of each federal bank
is owned by the member banks
the fed spends most of it time and effort on
activities described as defensive
FED carries out its operations through its open market committee
because public announcement is not required
Organization structure of the FED
Board of Governors
Federal Reserve Banks
FOMC
Advisory Committee
Member banks
Functions of the FED 1
Board of Governors determine reserve requirements, responsible for changing the discount rate, supervising and regulating member banks and bank holding companies. Establishing and administering consumer protection regulations and over seeing the federal r
Functions of the FED 2
Federal Reserve Banks
(12 Districts)
Propose discount rates.
hold reserve balances for depository institutions and lend to them at discount window.
Furnish Currency
collect, clear checks and transfer funds
handle government debt and cash balances
Functions of the FED 3
FOMC(Board of Governors and 5 Reserve Banks)
chiefly responsible for Monetary Policy
directs open market operations (buying and selling government securities)
Functions of the FED 4
Advisory committee
Consumer advisory council
Federal advisory council
Thrift institutions advisory council
Largest savings are
Personal savings
Personal Consumption expenditures
expenditures by individuals for durable goods
Finance companies
provide loans directly to consumers and business
Intermediation
is the accumulation of lending and savings by depository intuitions
Corporate savings for short term
working capitals purpose is the most important reason for business accumulating financial assets
Corporate savings for long term
save for major construction, equipment ,maintenance and repairs
Stages of a saver
formative/edu (do not save)
career/family (little saving)
wealth building stage (saves the most)
Retirement (spend the most)
Lender of last resort
Elastic currency
Banking reform passed
1933 & 1935
significant change in the banking reform
separation of commercial and investment banking
underlying need for a stronger central bank was apparent during
the great depression
FED's ability to influence economics stability stems from
ability to influence the availability and cost of money and credit
As chief banker the FED
Clears Treasury checks
Open market operations are executed by
The federal reserve bank of NY
Discount window
a lending facility where depository institutions can borrow from the FED