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Summary Trade and money

Course
- Trade and money
- Ben Ilal
- 2018 - 2019
- Hogeschool van Amsterdam
- International Business and Management Studies
151 Flashcards & Notes
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A snapshot of the summary - Trade and money

  • Chapter 22: Economic growth

  • What is potential GDP?
    potential GDP is the level of real GDP when the quantity of labor employed is at full employment
  • What is the relationship of labor demanded
    that is the relationship between the quantity of labor demanded (hired) and the real wage rate (price level).
  • what is the relationship of the supply of labor?
    the relationship of supply of labor is the relationship between quantity of labor supplied and the real wage rate. Supply= the labor hours the households are planning to work.
  • What changes potential GDP? (change in supply of labor)
    - average hours worked per worker 
    - working age population 
    - employment rate 
  • finance, savings and investment

  • What is financial capital
    funds that firms use to buy physical capital and that household use to buy a home or to invest in human capital
  • name three sources of funds who finance investment
    1. Household savings (C+S=T)
    2. Government budget surplus (T-G)
    3. National savings 
  • Funds are supplied and demand with these three types
    1. Loan Market 
    2. Bond market 
    3. Stock market 
  • What is the equation of net worth (solvency)
    net worth= market value assets (lent) - market value liabilities (borrowed)
  • Name 4 key types of financial institutions
    1. commercial banks 
    2. mortgage companies 
    3. pension funds
    4. insurance companies 
  • how is the wealth of the end of the year calculated?
    wealth beginning of the year + savings during the year 
    (income - consumption expenditures)
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