7.6 Key Terms
- Bank Loan
- Bond
- Consumer Price Index (CPI)
- Corporation
- Crowding Out
- Financial markets
- GDP deflator
- Interest rate
- Investment
- Loanable Funds Market
- Securities
- Stock
An amount of money which is promised to be repayed, including some rate of interest, over a predetermined period of time.
a financial contract that makes one or more fixed money payments at specific
dates in the future.
example: a borrower like a corporation, a city or state, or the federal government agrees to repay the amount that it borrowed and also a rate of interest over a period of time in the future; usually long-term (greater than 10 year) debt instruments.
A statistical measure of the average change in prices collected periodically for a market basket of consumer goods.
A business that "incorporates" - that is owned by shareholders that have limited liability for the company's debt but share in its profits (and losses).
When the government enacts policies that require borrowing, there is potentially less private investment which is a hindrance.
Marketplace where money is invested and borrowed, or in other words, where securities are traded
The GDP deflator is obtained by dividing the nominal GDP by the real GDP and multiplying the result by 100. The goal of the deflator is to keep track of price levels from one year to the next.
the current market rate paid to lenders or charged to borrowers.
An economy's income minus consumption and government spending.
The aggregate markets for loans, bonds, and stocks.
Synonym for financial assets, or a certificate or other financial instrument that has monetary value and can be traded. These can be debt securities like bonds or equity securities like stocks.
A specific firm’s claim on partial ownership.
