TAILIEUCHUNG - Lecture Principles of economics (Asia Global Edition) - Chapter 19

After studying this chapter you will be able to: Explain the relationship between savings and wealth, identify and apply the components of national saving, discuss the reasons why people save, discuss the reasons why firms choose to invest in capital rather than financial assets, analyze financial markets using the tools of supply and demand. | Saving, Capital Formation, and Financial Markets Chapter 19 McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. Learning Objectives Explain the relationship between savings and wealth Identify and apply the components of national saving Discuss the reasons why people save Discuss the reasons why firms choose to invest in capital rather than financial assets Analyze financial markets using the tools of supply and demand Savings and Wealth Saving is current income minus spending on current needs The saving rate is saving divided by income Wealth is the value of assets minus liabilities Assets are anything of value that one owns Liabilities are the debts one owes The balance sheet is a list of an economic unit’s assets and liabilities Specific date Economic unit (business, household, etc.) Individual Balance Sheet, 1/1/14 Assets Liabilities Cash $80 Student loan $3,000 Checking account 1,200 Credit card balance 250 Shares of stock 1,000 Car (market value) 3,500 Furniture (market value) 500 Total $6,280 $3,250 Net worth $3,030 Flow Values and Stock Values A flow value is defined per unit of time Income ■ Spending Saving ■ Wage A stock value is defined at a point in time Wealth ■ Debt The flow of savings causes the stock of wealth to change Every dollar a person saves adds to his wealth A high rate of saving today leads to an improved standard of living in the future Capital Gains and Losses Wealth changes when the value of your assets change Capital gains increase the value of existing assets Higher value for stock Capital losses decreases the value of existing assets Car accident damages bumper and front headlight Change in wealth = Saving + Capital gains – Capital losses US Stock Prices, 1960 - 2004 The Bull Market of the 1990s Stock ownership increased Direct purchases Mutual funds Pension and retirement funds Stock prices rose rapidly Capital gains on stocks increased household wealth May have decreased household savings Stock .

• Kinh tế học
• Principles of economics
• Lecture Principles of economics
• Market imperfections
• The international economy
• Capital formation
• Financial markets
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Welfare Economics
• Consumer surplus
• Demand curve
• Efficiency of markets
• Nature of an externality
• Market inefficiency
• Negative externalities
• Principles of microeconomics
• Lecture Principles of microeconomics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Principles of agricultural economics
• Agricultural economics
• Economics of agricultural production
• Theory of consumer behaviour
• Economics of market demand
• Dynamics in demand analysis
• Analysis of agricultural markets
• Agricultural markets
• Economics of trade
• Costs of taxation
• Deadweight loss
• Laffer curve
• Supply side economics
• Market forces
• Supply and demand
• Market economies
• Competitive Markets
• Thinking like an economist
• Economic models
• Circular flow diagram
• Production possibilities frontier
• The gains from trade
• Production possibilities
• Comparative advantage
• Absolute advantage
• Costs of production
• Total revenue
• Total cost
• Opportunity costs
• Price elasticity of demand
• Price elasticity
• Midpoint method
• Demand curves
• Factors of production
• Demand for labor
• Production function
• Marginal product of labor
• Controls on prices
• Price ceiling
• Price floor
• Market outcomes
• Theory of consumer choice
• Budget constraint
• Indifference curve
• Marginal rate of substitution
• Measuring nation’s income
• Economy’s income
• Gross domestic product
• Components of GDP
• International trade
• Determinants of trade
• Equilibrium without trade
• Production and growth
• Economic growth
• Monetary system
• Functions of money
• Federal reserve
• Central bank
• Open economy macroeconomics
• Economy macroeconomics
• Closed economy
• Open economy
• Public goods
• Common resource
• Types of goods
• Cost benefit analysis
• Aggregate demand
• Aggregate supply
• Short run economic fluctuations
• Economic fluctuations
• Tax system
• Federal Government
• Marginal tax rate
• Budget surplus
• Macroeconomic policy
• Debate over macroeconomic policy
• Stabilize the economy
• Monetary policy