Qualification > Commerce
peopleeeeeeeeeeeeeeeeee-eco paper 3
Name:
The Stock Exchange
The stock exchange: a market where sellers and buyers of financial instruments come together
- Financial instruments: shares, debentures, government bonds
- Because it is a market, equilibrium/market prices will be established
- Public limited companies issue new shares and/r debentures to raise finance (e.g. for expansion/purchase of fixed assets)
- Governments issue new bonds when they need to borrow money to finance their spending plans (not all government spending comes from taxation. E.g. raising taxation levels during a recession would be very unwise)
- These shares, debentures and government bonds can be bought and sold over and over again second hand on the stock exchange)
Why people buy shares/debentures and government bonds:
• For a ‘return’ which provides an annual income
o Shares can generate dividends out of profits
o Government bonds generate a fixed interest on the face value of a bond
o Debentures generate a fixed interest on the free value of the debenture
• To make a profit from the buying and selling of the share/debenture/bond itself
i dont actually understand the stock exchange that much :S very complicated
and rep i think thats REPutation. you + someone if they post something good/helpful and u - someone if theyre a pain in the a**
aquarian93:
thankss :)
and that's a + for u! lol
aquarian93:
and guys i hav a doubt wid this:
Analyze the different motives for spending, saving and borrowing
Discuss how and why different income groups have different expenditure patterns (spending, saving, borrowing)
thanks!
aquarian93:
guys its in the syllabus so i need ur help! :(
nid404:
Spending or saving depends on
-Tax rates
-Income
-Wealth
-Inflation rates
-Personal interests
-Exchange rates(banks)
In diff income groups
High income group spends higher proportion of their income on luxurious goods whereas low income groups spend a higher proportion of their income on basic necessities.
this is all you need
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