Saving, Investment & Financial Systems (Block 2)

Question 1

Bonds

Answer 1

Fixed-income securities representing debt owed by the issuer to the bondholder, typically paying periodic interest and returning the principal at maturity.

Question 2

Stocks

Answer 2

Securities representing ownership in a corporation, entitling the holder to a proportionate share of the company’s assets and profits.

Question 3

Calculating public savings, private savings and national savings

Answer 3

• Public savings: Government revenue minus government expenditure.
• Private savings: Disposable income minus consumption expenditure.
• National savings: The sum of public and private savings.

Question 4

Demand

Answer 4

The quantity of funds demanded by borrowers at different interest rates.

Question 5

Supply

Answer 5

The quantity of funds supplied by savers at different interest rates.

Question 6

Savings

Answer 6

Policies influencing the propensity to save, such as tax incentives for saving.

Question 7

Investment

Answer 7

Policies affecting investment decisions, such as tax breaks for investments or government spending on infrastructure.