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 | the first instance of a corporation selling stock to the public in order to raise capital. or a share is a certificate of ownership in a corporation. the desire to have goods and services sooner rather than later (all else being equal). 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. a bank/firm whose liabilities are greater in value than its assets. private spending on tools, plant, and equipment used to produce future output; i.e., the purchase of new capital goods. institutions such as banks, bond markets, and stock markets that reduce the costs of moving funds from savers to borrowers and investors. something of value that by agreement becomes the property of the lender if the borrower defaults. 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. is the ratio of debt to equity, D/E. income that is not spent on consumption goods. 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. |