objectives discuss investment activities that promote economic growth explain borrowing activities...

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Objectives Discuss investment activities that promote economic growth Explain borrowing activities by government. Businesses and consumers Describe future concerns of economic growth Essential Question – how does the government borrow money?

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Objectives

Discuss investment activities that promote economic growth

Explain borrowing activities by government. Businesses and consumers

Describe future concerns of economic growth

Essential Question – how does the government borrow money?

Investment Activities

How are you making an investment right now?– You are investing in your future right now by

being in school

– Companies invest all the time by buying buildings and equipment

Capital Spending

Capital Spending refers to money spent by a business for an item that will be used over a long period.

Capital projectsInvolve spending by businesses for items such as land, buildings and equipment and new products.

Where does the moola come from for all these capital projects!???!?

Personal Savings

Stock investments

Bonds

Personal savings….not much else to explain

What are some forms of personal savings?

The Stock Market

-Corporations are a major type of business org.

-Businesses can’t come up with all the money on their own so people invest in them

Stock Represents ownership in a corporation

David Choe – graffiti artist

Multi-millionaire overnight!

Was given the choice for $60,000 or stock to spray paint the walls of Facebook’s office.

He chose stock – now worth more than $200,000,000!

Painting Video

Walters Interview

What causes the value of stocks to change?

Affected by many factors, but the main one is SUPPLY and DEMAND– If a company has higher earnings, more people

will DEMAND it’s stock and want to buy it

– Causes the value of stock to increase

Stock Market Activity

Go to www.yahoofinance.com

The Bond Market

Another investment activity involves the sales of bonds.

If you purchase a bond, you are a creditor…it means you lent money to the organization

bondA bond represents debt for an organization.

Government Debt

If a surplus exists, government may reduce taxes or increase spending on various programs

Budget surplusWhen the government spends LESS than it takes in.

Government Debt

Budget deficitWhen the government spends MORE than it takes in.

This happens more often

Government Debt

National debtThe total amount owed by the federal government

www.usdebtclock.org