Explain the Relationship Between Surplus Units and Deficit Units

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Assignment Template for Individual Assignments

Subject Code: 333101 Student ID Number: 387399

Subject Name: Finance 1 Student Name: Yaxi Huang

Assignment Name or Number: assignment one

In this paper, I would report in two different parts. One of them is that why a typical university student is likely to be a deficit unit and another part is discussing how any one function of the financial system impacts on a typical university student. Before the paper proceeds, I would first briefly introduce some related concepts which would be referred in my following words. As I referred before, key words for the first part of my report are deficit unit and surplus unit. The deficit units require funds to meet planned expenditures and presumably are required to pay for the use of the funds. (Ben Hunt and Chris Terry, 2005:4) So as the typical university students, we are defined as the deficit units since at this stage we couldn't earn money to afford the payment. I read an article named “debt is the real university challenge”. This article is talking about that most of university student would have the debt due to the student loan. The data was collated by the national union of students showed that the student average debt is $20, 000. (The Observer 2010, website) The conclusion we could get from the article is that, even if there are some of university student could make enough money to pay for their costs of living and course fees, most of them are still deficit units with high debt. At the same time, there are surplus units exist to provide us the funds to afford our payment. Surplus units have funds that they supply to deficit units on a contractual basis. (Ben Hunt and Chris Terry, 2005:4) For us, the surplus units could be 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...
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