|
|
DEPRECIATION: A more or less permanent decrease in value or price. "More or less permanent" doesn't include temporary, short-term drops in price that are common in many markets. It's only those price declines that reflect a reduction in consumer satisfaction. While all sorts of stuff can depreciate in value, some of the more common ones are capital, real estate, corporate stock, and money. The depreciation of capital results from the rigors of production and affects our economy's ability to produce stuff. A sizable portion of our annual investment is thus needed to replace depreciated capital. The depreciation of a nation's money is seen as an increase in the exchange rate. This process is described in detail in the entry on the J curve.
Visit the GLOSS*arama
|
|
|
|
|
Lesson 11: Circular Flow | Unit 2: Financial Markets
|
Page: 9 of 22
|
Investment is business expenditures on gross domestic product for capital goods.- The green flow from the business sector to the product markets is investment. The physical flow of capital goods moves in the opposite direction.
The process:- Financial markets have buyers (savers) and sellers (borrowers).
- Savers buy legal claims that divert income TO financial markets.
- Borrowers sell legal claims that divert income OUT of the financial markets.
- The business sector borrows income through financial markets, which is used to finance capital investment.
|
|
|
|
|
|
|
CONSUMPTION LINE A graphical depiction of the relation between household sector consumption and income that forms one of the key building blocks for Keynesian economics. A consumption line is characterized by vertical intercept, which indicates autonomous consumption, and slope, which is the marginal propensity to consume and indicates induced consumption. The aggregate expenditures line used in Keynesian economics is derived by adding or stacking investment, government purchases, and net exports to the consumption line. Saving is indicated as the difference between the consumption line and the 45-degree guide line.
Complete Entry | Visit the WEB*pedia |
|
|
PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store trying to buy either a travel case for you toothbrush or a looseleaf notebook binder. Be on the lookout for telephone calls from long-lost relatives.
Your Complete Scope
This isn't me! What am I?
|
|
|
North Carolina supplied all the domestic gold coined for currency by the U.S. Mint in Philadelphia until 1828.
|
|
|
"Inside the ring or out, ain't nothing wrong with going down. It's staying down that's wrong. " -- Muhammad Ali
|
|
LBO
Leveraged Buyout
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
