Chapter 7 - Savings and investment process. This chapter includes contents: Identify and briefly describe the major components of the gross domestic product, describe how the balance between exports and imports affects the gross domestic product, describe recent developments in the aggregate level of personal and corporate savings, | Chapter 7 Savings and Investment Process © 2011 John Wiley and Sons Chapter Outcomes Identify and briefly describe the major components of the gross domestic product Describe how the balance between exports and imports affects the gross domestic product Describe recent developments in the aggregate level of personal and corporate savings Chapter Outcomes (Continued) Describe the principal sources of federal government revenues and expenditures Discuss the historical role of savings in the United States and how savings are created Identify the major sources of savings in the United States Chapter Outcomes (Concluded) Identify and describe the factors that affect savings Describe the major capital market securities that facilitate the savings and investment process Discuss the role of individuals in the recent financial crisis Gross Domestic Product (GDP) and Capital Formation Gross Domestic Product: Measures the output of goods and services in an economy over a specified time period Capital Formation: Process of constructing real property, manufacturing producers’ durable equipment, and increasing business inventories Gross Domestic Product (GDP) Components GDP is composed of: Personal Consumption Expenditures Government Expenditures including Gross Investment Gross Private Domestic Investment Net Exports of Goods and Services Gross Domestic Product (GDP) Components (continued) Equation: GDP = PCE + GE + GPDI + NE Personal Consumption Expenditures (PCE): Expenditures by individuals for durable goods, nondurable goods, and services Government Expenditures (GE): Purchases of goods and services by the government Gross Domestic Product (GDP) Components (continued) Equation: GDP = PCE + GE + GPDI + NE Gross Private Domestic Investments (GPDI): Investments in residential & nonresidential structures, producers’ durable equipment, & business inventories Net Exports (NE): Exports minus imports of goods & services Recent Gross Domestic Product . | Chapter 7 Savings and Investment Process © 2011 John Wiley and Sons Chapter Outcomes Identify and briefly describe the major components of the gross domestic product Describe how the balance between exports and imports affects the gross domestic product Describe recent developments in the aggregate level of personal and corporate savings Chapter Outcomes (Continued) Describe the principal sources of federal government revenues and expenditures Discuss the historical role of savings in the United States and how savings are created Identify the major sources of savings in the United States Chapter Outcomes (Concluded) Identify and describe the factors that affect savings Describe the major capital market securities that facilitate the savings and investment process Discuss the role of individuals in the recent financial crisis Gross Domestic Product (GDP) and Capital Formation Gross Domestic Product: Measures the output of goods and services in an economy over a .
