Savings, investment and liquidity

Savings, investment and liquidity

1. FIAT MONEY

   • Valueless money used as money because of government decree

2. NOMINAL MONEY VS. REAL MONEY

   • Nominal
     • Actual value that money maintains over time.
   • Real
     • How many things you can buy with it?
       • 2020
       • 2000

3. MARKET

   • Financial Markets
   • 1) Supply
   • 2) Demmand
   • 3) Good
   • 4) Price
   • Markets with surplus & shortfall

4. TIME PREFERENCE THEORY

   • Income =
     • Consumption
       • +
         • Savings
           • Future consumption
       • Present

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