Module 22 MACRO Terms

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15 Terms

1

Budget surplus

when a government's revenue exceeds its expenditures

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2

National savings

portion of national income that is not consumed and is instead set aside for investment or future use

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3

Capital inflow

the amount of money that comes into a country's economy from other countries

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4

Financial asset

things that hold value

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5

Transaction costs

expenses incurred when buying or selling a good or service, outside the cost of the good or service itself

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6

Budget balance

the difference between government revenue and government spending

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7

Physical asset

tangible item that has economic value

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8

Financial risk

uncertainty or possibility of incurring losses or receiving lower-than-expected returns from an investment

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9

Diversification

the process of shifting an economy away from a single income source toward multiple sources from a growing range of sectors and markets

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10

Loan-backed securities

bonds backed by a pool of loans

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11

Financial intermediary

an institution that acts as a middleman between two parties in order to facilitate a financial transaction, ex bank

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12

Default

borrowers fail to meet pay back of loans

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13

Mutual fund

a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt

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14

Budget deficit

a government's total spending exceeds its total revenue

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15

Pension fund

mutual fund that holds assets in order to provide retirement income

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