Chapter 26 is about savings, investments, and the financial system.
Financial institutions are:
stock market
banks
mutual funds
help households save their income
Savings must equal investments in a closed economy
Price and Quantity of savings and interest rate are also governed by a supply and demand graphs
Market for loanable funds is created with:
borrowing
lending
analyze using supply and demand graphs
Bonds are simply an IOU
Equilibrium interest rate and amount of loanable funds are affected by:
tax policies
budget surpluses and deficits
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