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Key Variables in the Economy - Coggle Diagram
Key Variables in the Economy
Chapter 17: A country standard of living depends on its ability to produce goods and
Policy makers wishing to encourage growth in standard of living, must do so by encouraging increase accumulation in production of goods and services
People in richer countries have better standards of living- They are much healthier, have better education, and nutrition is better
Productivity is a large part of a good GDP and is vital for a prosperous economy
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Chap, 19 Finance help people with tools for investing.
Present value using things like interest rates, to determine the future value of money.
future value helps to determine how much yield from current savings one will gain in future from interest rate
Chapter 18) The financial system helps the savers to increase their investment by allowing others to borrow money as loans
Government sells bonds to the public when the need money, the public cashes in when bonds reach level of maturity
Investment in a foreign country helps to build capital-Foreign Direct Investment.
Chapter 17: Countries, who mismanage their money, leaves the citizens in poverty. They steal money from the country by raising taxes, while the economy is getting worse because the people have no money to live at a higher standard. High inflation
Low productivity, low GDP, no education, no training, no savings for
more purchase capital
The more people the more difficult it is to have a good economy. if the population is not trained, they cannot increase production for goods and services. They need capital to increase production
No productivity reduces standard of living and that is why you have poor countries.
Chapter 18) Borrowers demand money from the financial institutions knowing they have to repay with interest.
Junk Bonds can be credit risks, the risk can be check by S & P by their ratings.
Undeveloped countries get loans from the world bank to help develop their countries
19 contrast-people must prevent Risk aversion-invest correctly and safely.
Diversifications helps, don't put your eggs in one basket, get several types of investment.
protect your investments with insurance