Financial institutions in the u. s. economy suppose nick would like to invest $3,000 of his savings. one way of investing is to purchase stock or bonds from a private company. suppose touchtech, a hand-held computing firm, is selling stocks to raise money for a new lab—a practice known as finance. buying a share of touchtech stock would give nick the firm. in the event that touchtech runs into financial difficulty, will be paid first. suppose nick decides to buy 100 shares of touchtech stock.

Consider the market for gas-powered small cars. assume gas-powered small cars are a normal good. for each of the following events, identify which of the determinants of demand or supply are affected. if demand is unaffected by this event because it creates only a supply change, select the “none” option under the “demand determinant” column. similarly, if supply is unaffected by this event because it creates only a demand change, select the “none” option under the “supply determinant” column. event demand determinant supply determinant people decide to have more children. the price of electric small cars falls. the discovery of a new source of iron ore lowers steel prices. an economic recession lowers people’s wealth. a number of major car dealers decide to switch from selling gas-powered cars to selling electric cars. show the effect of the following event on the market for gas-powered small cars: people decide to have more children for each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.