Understanding Money and Financial Capital

Financial capital is a long term store of value while money is a short term store of value.

Trust is important for financial capital because high levels of well-founded confidence are essential in the economy.

Capitalism is a relatively free market system based on the concept that the owners of capital are entitled to a reward for putting their capital at risk.

<p>The resources used in production are land, labour, capital, and enterprise.</p> Signup and view all the answers

<p>Capital could mean money put into a business, knowledge, skills, transport, infrastructure, and relationships.</p> Signup and view all the answers

<p>An economy where resources are allocated by the market through the market mechanism.</p> Signup and view all the answers

<p>The transfer of businesses from private ownership to public ownership.</p> Signup and view all the answers

<p>It ensures that companies do not pay out share capital to shareholders for the protection of creditors.</p> Signup and view all the answers

<p>People who have a legitimate interest in the organization's activities.</p> Signup and view all the answers

<p>A formal debt investment issued by a borrowing organization and bought by a lender.</p> Signup and view all the answers

<p>It is the failure of the borrower to make repayments when due.</p> Signup and view all the answers

<p>Covenants are part of the documentation that protects the investor and provide additional rights.</p> Signup and view all the answers

<p>To assess the creditworthiness of an organization.</p> Signup and view all the answers

<p>Shareholders have no liability beyond the amount of capital they agreed to invest.</p> Signup and view all the answers

<p>Public sector comprises the government and governmental organizations, while the private sector consists of organizations established to make a profit.</p> Signup and view all the answers