Explain the Relationship Between Surplus Units and Deficit Units Essay Example

our parents, our guardians, or the banks.

And they would provide us enough money to finish our courses and other kinds of necessary payments, for example, cost of living. They provide us funds as form as personal loans, or assists and so on. The essential reason for why we are deficit unit is that we are not able to make enough money. Why we couldn't make enough money, there are several reasons for this question. One of them is that, the knowledge we get now didn't worth the money we need. The knowledge I referred doesn't mean that the knowledge about earn money, it means that professional knowledge in our major areas.

We need to apply all the knowledge we learned in the lectures and the tutorials to work. As a student major in finance, I would like to work in some financial services such as Morgan Stanley if I am looking for a job. But those financial services wouldn't need me to work for them at this stage. It is because that compare with those graduates, students still studying in university such as me didn't have enough abilities to earn money for them. I couldn't earn the enough revenue for them just for the limited knowledge I got. So they won’t hire me to do the part-time job for them.

Hence I still couldn’t get enough money if I work at this stage. It is why I said the knowledge we get now didn't worth too much money we need. And it is the most important reason for why a typical university student is a deficit unit. Another reason for why we couldn't get enough money is

time. Although some of us didn't do the job in those financial services, they could do the part-time jobs such as waiters in restaurants. But we couldn't spend all of our time on part-time job. We are full-time students. And the most important thing for us at this stage is studying.

I read the following sentences “based on a survey of 27 public universities, found that 40 per cent of full-time undergraduates believed paid work was hurting their courses, compared with 16 per cent in 2000” (The Age, 2010, website)in an article name “uni student debt levels too high”. We could know that, the allocation of time would also affect a typical university student if he chose earning some money by a part-time job. Time is limited; if he wanted to do the part-time job at this time period it means that he gave up studying at this time period. e might get lower mark or failed in the final exams if he pay too much attention on the part-time job.

And for most of students, the best way to avoid this situation is chose not to do the part-time job or only put a few time in part time job. Absolutely the money earned from part time job is limited, so in general, although students could get the part-time job, they are still deficit units. The second part of my report is discussing how a function of financial system affects a typical university student. And the function I would use in my report is flow of funds.

Flow of funds refers to financing that generally is based on sang and the investment of funds. (Ben Hunt and

Chris Terry, 2005:4) As I said before, we are financing funds from surplus units. If we borrowed money from the banks to pay the fees of course, it is a kind of flow of funds. The banks are intermediaries, in another words, bans are mainly parts of authorized deposit-taking institutions. They get money from the surplus units and then borrow money to us. We need to pay higher interest rate to bank than the bank paid to surplus unit.

So the funds flow from the surplus unit to us. It was very important to a typical university student, we are required money to pay fees, and the ADIs financing funds then borrow to us. so we could meet the planned expenditures. Finance is not only a subject but a very important part of our life. We learn finance now and compose a part of financial world, at this stage we are deficit units, and after many years later we would be surplus unit. Not only the flow of funds are related to us, but also others function affect us every day.