This chapter discusses the financial system and how it relates saving and investment through the market for loanable funds. It introduces important financial institutions like banks and bond markets that channel funds from savers to borrowers. It also explains key macroeconomic concepts including national saving, investment, and how government budget deficits can affect the economy by changing the supply of loanable funds. The chapter aims to develop a model of the supply and demand for loanable funds to analyze the effects of fiscal policies on interest rates, saving, investment and economic growth.
Original Description:
Chapter 26 study guide
Original Title
Chapter 26 - Saving Investment and the Fincancial System
This chapter discusses the financial system and how it relates saving and investment through the market for loanable funds. It introduces important financial institutions like banks and bond…