Financial Markets and Instruments: Terminology and Concepts, Quizzes of Economics

Download Financial Markets and Instruments: Terminology and Concepts and more Quizzes Economics in PDF only on Docsity! TERM 1 Financial Market DEFINITION 1 A collection of people and firms that buy and sell securities or currencies TERM 2 Security DEFINITION 2 Claim on some future flow of income, such as a stock or bond TERM 3 Bond DEFINITION 3 security that promises predetermined payments at certain points in time. At maturity, the bond pays its face value. Before that, the owner may receive coupon payments TERM 4 Interest DEFINITION 4 payment for the use of borrowed funds TERM 5 Default DEFINITION 5 failure to make promised payments on debts TERM 6 Stock DEFINITION 6 ownership share in a corporation. (Equity) TERM 7 Savers DEFINITION 7 people who accumulate wealth by spending less than they earn TERM 8 Investors DEFINITION 8 people who expand the productive capacity of borrowers TERM 9 Diversification DEFINITION 9 the distribution of wealth among many assets, such as securities issued by different firms and governments TERM 10 Mutual Fund DEFINITION 10 financial institution that holds a diversified set of securities and sell shares to savers TERM 21 Real Gross Domestic Product DEFINITION 21 the measure of an economy's total output of all goods and services TERM 22 Microfinance DEFINITION 22 small loans that allow poor people to star businesses TERM 23 Centrally Planned Economy DEFINITION 23 (command economy) system in which the government decides what goods and services are produced, who receives them, and what investment projects are undertaken TERM 24 Nominal GDP DEFINITION 24 total value of all final goods and services produced in an economy in a given period of time TERM 25 Aggregate Price Level DEFINITION 25 average of prices of all goods and services TERM 26 Inflation Rate DEFINITION 26 percentage change in aggregate price level over period of time