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A PRIORI: A presumption made before an analysis is undertaken, often based on experiences, beliefs, or deductions from seemingly self-evident propositions about how the world works. This is a Latin for assumption or axiom. A similar sounding, but opposite term is a posteriori, which is derived from observation or facts. For example, in the study of economics of crime you might assume, a priori, that people are basically "good", because that just seems to be part of human nature, and conclude, a posteriori, that people are more likely to commit crimes when the threat of capture and conviction is lower.
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Lesson 11: Circular Flow | Unit 2: Financial Markets
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Page: 10 of 22
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- The main function of financial markets, which is to divert national income from household consumption to business investment.
- The difference between the real or physical side of the economy (the production of goods that satisfy wants and needs) and the paper or financial side (legal claims on or ownership of physical resources, goods, and production).
- How income is diverted from legal-claim buyer to legal-claim seller through the financial markets.
- Why saving can be thought as a nonconsumption use of income, as making a loan, or as supplying income to the financial markets in exchange for a legal claim.
- Two basic reasons to save: (1) in return for an interest payment or (2) to accumulate income that can be spent later.
- Investment, which is business sector expenditures on gross domestic product for capital goods.
- How the business sector borrows income through financial markets and uses this income flow to finance capital investment.
- Why adding saving, investment, and financial markets does not change the total volume of the circular flow.
- That imbalances between saving and investment trigger economic stability, business cycles, unemployment, and inflation.
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CONGRESSIONAL BUDGET OFFICE A nonpartisan governmental support agency that provides Congress with analyses needed for economic and budget decisions and with the information and estimates required for the Congressional budget process. The Congressional Budget Office was created by the Congressional Budget and Impoundment Control Act of 1974. It began operating on February 24, 1975. The Congressional Budget Office is composed primarily of economists and public policy analysts. About 70 percent of its professional staff hold advanced degrees in either economics or public policy.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time browsing about a thrift store wanting to buy either a black duffle bag with velcro closures or any book written by Isaac Asimov. Be on the lookout for jovial bank tellers.
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The portion of aggregate output U.S. citizens pay in taxes (30%) is less than the other six leading industrialized nations -- Britain, Canada, France, Germany, Italy, or Japan.
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"It takes generosity to discover the whole through others. If you realize you are only a violin, you can open yourself up to the world by playing your role in the concert. " -- Jacques Yves Cousteau, marine explorer
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BIF
Bank Insurance Fund
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