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ADVERTISING: Information provided about a product by a company to promote or maintain sales, revenue, and or profit. Advertising is often an explicit method of signalling that sellers use to provide information to buyers. The primary objective of advertising from the sellers perspective is to increase (or at least maintain) demand for a product. To accomplish this objective advertising provides buyers with two important types of information -- prices and product quality.

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Lesson 18: Banking | Unit 5: The Economy Page: 22 of 24

Topic: Benefits <=PAGE BACK | PAGE NEXT=>

Banks have two beneficial roles in the economy.

First: As financial intermediaries, banks match up savers and borrowers.

  • They are an effective means of diverting household income into investment expenditures for capital goods.
  • They are a vital link between the real and financial sides of the economy.

Second: As depository institutions, banks supervise a share of the nation's M1 money supply.

  • They have a big responsibility because money is critical to a complex, market-oriented economy.

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PRODUCT INNOVATION

An innovation of a new product, technology, or idea that generates a beneficial improvement in society and the economy; one that is fundamentally different from existing products, technologies, or ideas. The contrast is with a process innovation, which is an improvement in an existing product, technology, or idea.

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Today, you are likely to spend a great deal of time driving to a factory outlet seeking to buy either a box of multi-colored, plastic paper clips or several orange mixing bowls. Be on the lookout for neighborhood pets, especially belligerent parrots.
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There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
"If anything terrifies me, I must try to conquer it. "

-- Francis Charles Chichester, yachtsman, aviator

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