Download presentation
1
Sources of Capital CHAPTER 9 SECTION 1: Saving SECTION 2: Investing
Holt Economics 4/17/2017 CHAPTER 9 Sources of Capital SECTION 1: Saving SECTION 2: Investing SECTION 3: Stocks, Bonds, and Futures SECTION 4: Borrowing and Credit Chapter 9
2
Objectives: Saving SECTION 1
What benefits do people gain by saving money? How do savings accounts differ from time deposits? How do economists measure savings?
3
Benefits of saving money:
SECTION 1 Saving Benefits of saving money: security interest
4
Difference between savings accounts and time deposits:
SECTION 1 Saving Difference between savings accounts and time deposits: Savings accounts offer liquidity have variable interest rates Time deposits require the saver to leave money in the account for a specific amount of time offer higher and fixed interest rates offer reduced liquidity
5
SECTION 1 Saving Economists measure savings by calculating the savings rate, or the percentage of people’s unspent disposable income.
6
Objectives: Investing SECTION 2
What are the goals and elements of a personal financial plan? How do financial investment and real investment differ? How does real investment affect economic growth?
7
Goals and elements of a personal financial plan:
SECTION 2 Investing Goals and elements of a personal financial plan: spending and saving plan—to create a personal budget investment plan—to put money to work retirement plan—to save and invest money for retirement estate plan—to allow the transfer of a person’s property after death
8
Difference between financial investment and real investment:
SECTION 2 Investing Difference between financial investment and real investment: financial investment—exchanging property ownership and payments to make a profit real investment—using money to create new capital goods
9
SECTION 2 Investing Real investment affects economic growth by increasing the number of capital goods used by producers.
10
Objectives: Stocks, Bonds, and Futures SECTION 3
Why and how do people invest in stocks? What factors influence stock prices? How do corporate and government bonds differ from stocks? What are the advantages and disadvantages of futures?
11
Why and how people invest in stocks:
SECTION 3 Stocks, Bonds, and Futures Why and how people invest in stocks: to gain profit to limit the risk on their investments to become a part owner of a corporation How to invest in stock: buy from a broker buy from an investment bank
12
Factors that influence stock prices:
SECTION 3 Stocks, Bonds, and Futures Factors that influence stock prices: corporate finances investor expectations external forces, such as changes in the economy or international events
13
Corporate and government bonds
SECTION 3 Stocks, Bonds, and Futures Corporate and government bonds offer lower interest than stock dividends offer less risk than stock
14
Advantages of futures:
SECTION 3 Stocks, Bonds, and Futures Advantages of futures: high profit potential guarantee that original purchase price of the futures will be honored Disadvantages of futures: high risk requires specialized knowledge about commodities being bought or sold
15
Objectives: Borrowing and Credit SECTION 4
How do lenders make money on loans? What factors influence a credit rating? How can credit help the economy?
16
Ways lenders make money on loans:
SECTION 4 Borrowing and Credit Ways lenders make money on loans: interest repossession
17
Factors that influence a credit rating:
SECTION 4 Borrowing and Credit Factors that influence a credit rating: ability to pay number of assets owned credit history
18
Benefits of credit to the economy:
SECTION 4 Borrowing and Credit Benefits of credit to the economy: stimulates growth promotes stability
19
CHAPTER 9 Wrap-Up 1. Identify which of the following savings plans would provide the greatest possible liquidity: regular savings accounts, certificates of deposit, savings bonds. Explain your answer. 2. Why do economists study savings rates? Name one important determinant of savings rates in the United States. 3. Explain the difference between financial investment and real investment. Provide an example of each type of investment.
20
CHAPTER 9 Wrap-Up 4. Describe the different ways that you can earn profits from stock purchases. Compare a capital gain and a capital loss. 5. How does a broker’s job differ from that of a market analyst? 6. What are the benefits and liabilities of credit? Describe three pieces of legislation that protect consumers from unfair credit practices.
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.