The Financial System and the Economy
This chapter will enable you to develop an understanding of the following:
Types of economic units
Role of a financial system in the economy
National income accounts
Flow of funds analysis
Trends in saving and investment
Trends in household financial saving and liabilities
Relationship between a financial system and economic growth.
All economies operate with a stock of real and financial assets. Real assets may be tangible or intangible. Examples of tangible real assets are land and natural resources, buildings, inventories, equipment, durables, and infrastructure. Examples of intangible real assets are human capital, organisational systems, and governments. Every ...