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On the other hand, there are users whose spending needs exceed their current income levels so they have a deficit. Therefore, they require additional funds to make up the difference.
These funds can be trasferred from suppliers to demanders of money in two ways. First is through Financial institutions that are of two types including depository insitutions such as commercial banks, saving and credit unions (also known as financial intermediaries) and non-depository instituions such as life insurance companies, pension funds and finance companies. Depository institutions especially banks accept deposits from savers (lenders) of money that they can withdraw on demand. They pool customer deposits and use these funds to make loans or investments to demanders or borrowers of money (consumers and businesses). These institutions make money because of interests rate that they charge from demanders, which is higher than what they to pay to savers or depositors of money. On the other hand, non-depositry institutions such as insurance companies accept business risks of their customers in return for a series of payments called premiums. They then invest their excessive funds after meeting their operating expenses (insurance claims, salaries etc). Finance companies offer short-term loans to borrowers. They usually sell securities or borrow funds from commercial banks therefore they tend to charge higher interest rates as compared to banks.
Second is through financial markets where people and organizations wanting to borrow money are brought together with those having surplus funds. Financial markets are primarily divided into primary and secondary markets. Primary market are those in which corporations raise funds by issuing new securities. In Secondary markets, on the other hand, previously issued securities such as mortgages, bonds and stocks are traded among investors. Stock exchanges are perhaps the best example of these type of markets.
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Usually the government exercises its borrowing authority when there is a shortfall between its expenditure. This occurs after Canadian Parliament authorizes the government to do so through main and supplementary estimates and in interim supply, and its revenues.
Date US Deficit - International Borrowing
The present US account deficit persists to go higher and higher, both in share of the US GDP and dollar terms. These tendencies have raised worries to the rest of the world on the sustainability of the US external position and where the state will borrow money from when it has massive debts from major countries.
Choosing to ignore or discount consumers’ beliefs and attitudes on a product as a way of developing a sustainable marketing strategy would not guarantee an automatic success. In contrast, marketers of perceptive nature leverage their degree of attitudes understanding to help them predict consumer behavior.
Savings Definition Savings is the amount of the disposable income which is not spent on the consumption or use of consumer goods. It is either accumulated or directly invested in payment of home mortgage, in capital equipment etc. It can also be invested indirectly by purchasing the securities.
However, the recent developments in Britain’s political economy show that the country currently does not have a very prospective business environment. Evidences suggest that unfavourable factors like a depressed economy, vague market conditions and financial struggles pose potential threat to the successful launch of a new business in the region.
are appropriately acknowledged. This work contains a list of references that are employed.
Countries all over the world are indisputably experiencing an economic crisis, and are possibly headed for a profound recession in the recent years.
Now the borrowers can question the acts of the borrowers that make their relationship unfair in a court. They can approach now Financial Ombudsman before going to go to the court as an alternative dispute resolution measure even without the consent of the lenders.
and salaries). Expenditure based on borrowings and existing wealth can add to total spending. There is another term called injections which equals borrowing for purchasing or investment. If injections are greater than the leakages, in other words there is more borrowing than savings, the circular flow grows and there is economic prosperity.
Whilst consumers are amassing more debt to finance purchases such as cars, electronic gadgets (state of the art computers, television, mobile phones, refrigerators) holidays and getting onto the property ladder, which are all aimed at making life more comfortable and improving business for these companies and their stakeholders.
Big spenders differ greatly from the low-income consumer. An educated consumer has a different pattern of consumption from an uneducated one.
Consumption is to be treated 'as a process by which artifacts are not simply bought and consumed, but given meaning through their active incorporation in people's lives (Jackson 1993:209, p.
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