Finance is a term that deals with the liquid resources of governments,
enterprises, organizations, and individuals. The financial system
involves printing and circulating money, providing banking facilities,
granting credit, and making investments. Simply put, finance is the
process whereby entities that need funds or capital and can put them to
productive uses borrow from those who have saved liquid assets, with
agreed-upon interest payments as the incentive.
The three primary types of finance are personal finance, business finance,
and public finance. Personal finance deals with family budgeting,
personal savings and investments, and consumer credit issues.
Business finance uses quantitative accounting data, statistical tools,
and economic theory to further the objectives of a business entity.
Public finance involves government taxation and expenditures, as well as
the financing of government budget deficits via marketable securities
and other means. Since the economic difficulties of the 1930s, the
role of public finance in the economic affairs of the United States has
Although common economic principles are involved in all types and levels
of financial transactions, there are different financial and societal
issues that affect international, corporate, and personal finance.
The International Finance Corporation
is a member of the World Bank Group and is a leading source of equity and
loan financing for private sector projects in the developing world.
The American Finance Association is
an academic organization that publishes the journal Finance and is
devoted to the study and promotion of knowledge about financial
economics. For individuals, an excellent personal finance resource
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