Unit III Part 2
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Unit III Part 2






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Unit III Part 2 Unit III Part 2 Presentation Transcript

  • …To attend college at the greatest place on earth, it will cost… In-State Tuition: 2008-2009 academic year: $23,548 – Freshman & Sophomore Standing $24,604 – Junior & Senior Standing $34,782 Out of State: This includes tuition, fees, room, and board! In-state, more than $100,000 for four years (and the price increases at a rate of ≈5% per year!)
  • …to attend a well-known private university…that is too close to home! During the 2008-2009 academic year …living on campus or in off-campus housing: $50,175.00 This includes tuition, fees, room, and board! More than $200,000 for four years (and the price increases at a rate of ≈5% per year!)
  • Savings and Capital Formation An economy must be able to … • produce capital if it is to satisfy the wants and needs of its people. To produce capital… • people must be willing to save, which in turn releases resources for use elsewhere. When people save … • they make funds available for others.
  • Savings and Capital Formation When businesses borrow these savings... • – New goods and services are created. – New plants and equipment are produced. – New jobs are created. Savings makes economic growth possible!!!
  • “Savings” v. “Saving” What is the difference between savings and saving is?  savings: the dollars available when people abstain from consumption.  Saving: the absence of spending What are the two things you can do with your income? Spend it … or Save it!
  • The Financial System • Definition: provides a way to transfer savings to investors. Surplus Funds Financial Intermediaries Commercial Banks Savers Borrowers Savings Banks Households, Governments, Mutual Funds Businesses Businesses Pension Funds Finance Companies Life Insurance Companies Credit Unions Financial Assets
  • The Financial System D. B. A. C. E.
  • The Financial Crisis and Credit Crunch http://tinyurl.com/4a3bzr
  • Exit Ticket - The Financial System Complete this on a separate piece of paper. • Number your paper from 1-4. • Do not write out each question. • B. A. C. 1. Label the parts of the Financial System above (draw the diagram if that is helpful to you) 2. What is a financial asset? List three [3]. 3. What is a financial intermediary? List five [5]. 4. How does the financial system work?
  • The Financial System • What does each letter represent? • Give 2 examples of savers, 2 examples of borrowers, 3 examples of financial intermediaries and 1 example of a financial assets at each place. D. B. A. C. E.