 Capital Spending: money spent by a business for an item that will be used over a long period.  Capital Projects: spending by businesses for items such as land, buildings, equipment, and new products.

 The money for capital projects comes from three sources:  Personal Savings  Stock Investments  Bonds

 Companies use money you deposit in a bank or other financial institution. In return, savers are paid interest on the money they deposit.  In recent years, the personal savings rate of the United states has been quite low, often below one percent.

 Stock represents ownership in a corporation.  Stock ownership is often called equity which means ownership.  Many people invest by becoming part owner.

 Supply and demand  State of the economy  The company’s earnings  The confidence of the investors

 Bonds represent debt for an organization.  If you purchase government or corporate bonds you are a creditor (the government or corporation owes you) and you receive interest for the use of your money.

 “Buy now, Pay later”

 A budget surplus occurs when the government spends less than it takes in.  A budget deficit occurs when the government spends more than it takes in.  Over time, the deficit may build up. The total amount owed by the federal government is called the national debt.  hUrcdrSc hUrcdrSc

 Loans, bonds, and mortgages are common borrowing methods used by businesses.  Using the funds of others can help expand sales and profits.  Poor debt management can result in a company going out of business.

 People commonly use credit cards, auto loans, and home mortgages to finance their purchases.  Careful use of credit can be important for economic growth. In contrast, unwise borrowing can result in legal action and other trouble.

 Economic problems that exist and need to be solved:  Many people do not have access to adequate health care.  Some people do not have proper housing.  Traffic and crime are also matters of concern for many.  Too many workers unemployed.

 In order to maintain or increase a country’s standard of living and to prevent unemployment from rising, economic growth is needed.  Economic growth is important because it provides jobs and allows people an opportunity to better meet their needs and wants.