
CHAPTER 7 
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 ...