Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
saving investment time preference market for loanable funds financial intermediary bond collateral crowding out arbitrage stock initial public offering (IPO) owner’s equity leverage ratio insolvency | income that is not spent on consumption goods. private spending on tools, plant, and equipment used to produce future output; i.e., the purchase of new capital goods. a bank/firm whose liabilities are greater in value than its assets. the practice of taking advantage of price differences for the same good in different markets by buying low in one market and selling high in another market. something of value that by agreement becomes the property of the lender if the borrower defaults. a sophisticated IOU that documents who owes how much and when payment must be made. is the value of the asset minus the debt, E = V – D. the decrease in private consumption and investment that occurs when government borrows more; also, the decrease in private spending that occurs when government increases spending. the market where suppliers of loanable funds (savers) trade with demanders of loanable funds (borrowers), thereby determining the equilibrium interest rate. the desire to have goods and services sooner rather than later (all else being equal). the first instance of a corporation selling stock to the public in order to raise capital. is the ratio of debt to equity, D/E. institutions such as banks, bond markets, and stock markets that reduce the costs of moving funds from savers to borrowers and investors. or a share is a certificate of ownership in a corporation. |