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Eco > Chapter 9 > Flashcards

Chapter 9 Flashcards

1
Q

Money available after taxes have been paid

A

Disposable Income

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2
Q

The amount of money in an account

A

Balance

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3
Q

An account can be converted into cash with little to no loss in interest payments

A

Liquidity

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4
Q

The saver leaves money in an account for a specific amount of time. Savers who open time deposits usually buy certificates of deposit or savings bonds

A

Time Deposits

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5
Q

The length of time that money must be deposited

A

Maturity

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6
Q

The percentage of people’s disposable income

A

Savings Rate

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7
Q

When people exchange their money for something of value, expecting to earn a profit in the future

A

Investment

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8
Q

A spending and saving plan which lists fixed expenses and flexible expenses

A

Budget

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9
Q

Payments that remain constant from month to month, includes mortgage and insurance

A

Fixed expenses

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9
Q

Payments that vary from month to month, includes food and entertainment

A

Flexible expenses

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10
Q

Why people Save

A

Major purchases, Large bills, Unexpected expenses, Long-term expenses, Inheritance

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11
Q

The risks and rewards of investing

A

You have a chance to make a profit, but also have a chance to lose money

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12
Q

Types of Savings

A

Savings account (Regular or money market account where you give money for a certain amount of time), Time deposits (CD’s, leave money for an extended period of time), Savings bond (Give out money and be paid back with interest

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13
Q

Types of Investment

A

Financial investment - when property ownership changes hands but nothing new it produced
Real investment - When investors use money to create something new (buying a piece of land and building a mall)

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14
Q

Stocks—What are they and how can they be beneficial— The process of trading them

A

Parts of the company that you can buy. Can gain a profit by selling at a higher price. Limited liability, can only lose what you invest

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15
Q

Determinants of Stock

A

Supply of the stock, Health of the company, Corporate finance, External forces, Investor expectations

16
Q

Types of Bonds

A

Corporate - Loan money to a corporation that agrees to pay you back
Government - Loan money to governments

17
Q

The Credit Card

A

Allows you to spend money you do not have, and you are required to pay it back. If you do not pay it back on time you need to pay interest. Makes large purchases more affordable

18
Q

Splitting shares into two, decreasing the price by half, and giving shareholders two shares for every share held before the split

A

Stock split

19
Q

The total cost of credit expressed as a yearly percentage

A

Annual Percentage rate

20
Q

Charging interest above the
government limit, which is illegal

A

Usury

21
Q

A legal declaration of inability to pay debts. Remains on a persons credit history for 14 years, and makes it difficult for them to borrow money or receive credit

A

Bankruptcy

22
Q

Money invested in entrepreneurial enterprises. Encouraged economic growth by helping entrepreneurs develop an idea into a product, improving production facilities, or finance product distribution

A

Venture Capital

23
Q

The difference between the higher selling price and the lower original purchase price

A

Capital Gain

24
Q

An investor who sells at a lower price than the purchase price

A

Capital loss

25
Q

Work for brokerage firms and link buyers and sellers of stock. Earn money by collecting a fee on each transaction

A

Brokers

26
Q

Buys and sells large blocks of stock. Buy stock when offered buy a company, and sell that stock to the public

A

Investment banking

27
Q

When the dow steadily rises over a period of time

A

Bull market

28
Q

When the dow average falls over a period of time

A

Bear market

29
Q

Interest on money owed to a bondholder

A

Yields

30
Q

Investors trade various types of products called futures instead of trading stock. Includes agricultural products, industrial products, and precious metals. They are required to sell after a certain period of time no matter what.

A

Futures

31
Q

A fact sheet containing data on the company’s finances. Used by investors to evaluate securities that are offered for sale

A

Prospectus

32
Q

Equal amounts that the principal and interest are divided into when paying loans

A

Installment

33
Q

An estimation of the probability of repayment

A

Credit rating

34
Q

A business that specializes in collecting financial information about consumers

A

Credit Bureau

35
Q

The total cost of credit expressed in dollars and cents

A

Finance Charge

Eco (3 decks)

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