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Savings and the Investment Process

Chapter Learning Objectives:

AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO DO THE FOLLOWING:

  • Identify and describe the major components of the gross domestic product (GDP).
  • Describe how the balance between exports and imports affects the GDP.
  • Discuss recent developments in the level of personal and corporate savings.
  • Describe the principal sources of federal government revenues and expenditures.
  • Identify the major sources of savings in the United States.
  • Identify and describe the factors that affect savings.
  • Describe major capital market securities that facilitate the savings and investment process.
  • Describe the types of mortgage loans available to individuals and how the mortgage markets facilitate home ownership.
  • Discuss the role of individuals in the recent financial crisis.

Where We Have Been...

Part 1 of this book introduced you to how the U.S. financial system works. In Chapter 1, you learned about the role of finance and were able to answer the question: What is finance? Chapter 2 provided you with information about the development of the U.S. monetary system, and Chapter 3 covered the importance of commercial banks and other ...

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