ECON 1020H Chapter Notes - Chapter 10: Inta, Loanable Funds, In Private
21 Jan 2016
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Chapter 10 notes for exam. Chapter 10: savings, investment, spending and the financial system. What you will learn in this chapter. Some competing views of what determines asset prices and why asset market fluctuations can be a source of macroeconomic instability. The domestic market for loanable funds. Investment in physical capital is necessary for long- run economic growth. Fall, 2014: households invest their current savings or wealth by purchasing assets. Assets come in the form of either a financial asset or a physical asset. A financial asset is also a liability from the point of view of its seller. It can be difficult, however, to assess their quality. Financial intermediaries are institutions such as mutual funds, pension funds, life insurance companies and banks. Banks are a key ingredient in long- run economic growth: asset market fluctuations can be a source of short- run macroeconomic instability. Expectations drive the supply and demand for assets.
