Module 22 MACRO Terms

Budget surplus

when a government's revenue exceeds its expenditures

National savings

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

Capital inflow

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

Financial asset

things that hold value

Transaction costs

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

Budget balance

the difference between government revenue and government spending

Physical asset

tangible item that has economic value

Financial risk

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

Diversification

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

Loan-backed securities

bonds backed by a pool of loans

Financial intermediary

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

Default

borrowers fail to meet pay back of loans

Mutual fund

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

Budget deficit

a government's total spending exceeds its total revenue

Pension fund

mutual fund that holds assets in order to provide retirement income