ECON 2020U Study Guide - Final Guide: Business Cycle, Market Basket, Price Level
Document Summary
Chapter 7 gdp and the cpi: tracking the macroeconomy. Compare american income and output to that of other nations. Track the economy"s condition throughout the business cycle. Stock: a share in the ownership of a company held by a shareholder. These stocks can pay dividend (shares of profit) Bond: borrowing in the form of an iou that pays interest. Government transfer: payment by the government to individuals for which no good or service is provided in return (social security) Disposable income: total household income minus taxes; available to spend on consumption or to save. Households don"t spend all of their disposable income. Some of it is saved in the financial markets. Private savings: disposable income minus consumer spending (disposable income that is not spent on consumption) Financial markets: the banking, stock, and bond markets, which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing. The government spends and borrows for various reasons.
