Economics Unit 3 Flashcards by Kyliegh Crampton | Brainscape

Q

Bear Market

A

describes the state of the economy when the market is doing
poorly and investors are not confident.

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Q

Bull Market

A

describes the state of the economy when market is doing well and
investors are optimistic about purchasing stocks.

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Q

Budget

A

plan for managing your money during a given time. will change as
income changes.

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Q

Capital Gains

A

money earned from buying and selling of stock

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Q

Credit Report

A

report containing all of your credit history including loans, credit apps., bankruptcies, personal info., etc.

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Q

Deductible

A

amount of money paid up front before ins. kicks in

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Q

Deductions

A

money subtracted from your pay before you receive your income. ex. fees, taxes, SS, etc.

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Q

Dividends

A

part of earnings paid quarterly to shareholders by check.

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Q

Expenses

A

what you spend your money on; fixed, variable, periodic.

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Q

Gold Standard

A

paper currency equivalent to a set amount of gold.

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Q

Identity theft

A

when someone uses your personal info. without your permission to
commit fraud or other crimes. Usually involves SS number, credit cards, etc.

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Q

Income

A

Any money you receive.

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Q

Investing

A

putting money to work to earn a profit.

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Q

Insurance

A

transferring the risk of a loss from one person to another in exchange for a premium.

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Q

Loan

A

buying money from the bank.

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Q

Premium

A

monthly amount you or your employer pays for your coverage.

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Q

Saving

A

foregoing present spending for future use.

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Q

What are four things to look for when researching stocks?

A

Book value, earnings per share, p/e ratio, and beta.

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Q

YTD

A

year to date, % stock has changed since January 1.

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Q

52 Week

A

high price and low price over past year

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Q

DIV

A

dividends

Q

YLD

A

yield %- dividend expressed as a % of the price of the share

Q

VOL

A

volume, total number of shares traded.

Q

Net Change

A

difference between closing prices from yesterday to today.

Q

What are the three main stock exchanges US stocks are listed on?

A

NYSE, AMEX, and NASDAQ

Q

What is a reason stocks change their value?

A

The market (supply and demand)

Q

What is a reason stocks change their value?

A

Change in Earnings

Q

What is a reason stocks change their value?

A

Change in Interest Rates

Q

What is a reason stocks change their value?

A

Change in Executives

Q

What is a reason stocks change their value?

A

Media Coverage

Q

What is a reason stocks change their value?

A

Corporate Takeovers/Mergers

Q

What are the four “other” types of investments we discussed and define each?

A

Bonds, Commodities, Mutual Funds, & Real Estate

Q

Mutual Funds

A

managed portfolio of stocks, bonds, etc. Buy shares and fund. uses money to buy investments for you. Profits returned in dividends.

Q

Bonds

A

IOU certifying you loaned money to govt or a corporation. Buyer pays and gets a fixed int. rate for a fixed amount of time. Can collect when it matures at the end of the set time.

Q

Real Estate

A

land, homes, apartments, buildings, etc.

Q

Commodities

A

anything for which there is demand, but which is supplied without any difference. Ex. iron, crude oil, coal, ethanol, salt, sugar, coffee beans, soybeans, aluminum, rice, wheat, gold and silver.

Q

What are the 6 types of insurance we discussed?

A

Property, Liability, Life, Auto, Home/Renters, & Health.

Q

What are the three types of identity theft stealing?

A

pre-texting or phishing, skimming, mail.

Q

What are three reasons to save your money?

A

emergencies, reach financial goals, take advantage of unforeseen opportunity

Q

fixed expenses

A

same every time, mortgage, car payment, etc.

Q

variable expenses

A

groceries, electric, gas

Q

periodic

A

car insurance, home/car repairs, etc.

Q

What are three types of savings methods?

A

Savings account- int. earning checking, passbook, and statement accounts.
Money market accounts- acts like savings account with restrictions.
Time deposits/Certificates of deposit(CD’s)- banks pay fixed amount
of interest for a fixed amt. of money for a fixed amount of time.

Q

What are the Fed’s day to day responsibilities?

A

supervise member banks/regulate holding companies, internationally bank operations, handle bank mergers, clear checks- shift reserves from one member bank to another, consumer legislation regulation- oversee credit info, regulate currency, set reserve requirements- interest rates and reserve rates.

Q

How is Net Worth calculated?

A

assets - liabilities

Q

What are the advantages of using credit?

A

Use now & pay later, don’t have to carry cash, creates a record of purchases, more convenient than writing checks, consolidates bills into one payment, payback may be cheaper with inflated dollars.

Q

What are the disadvantages of using credit?

A

Interest (creates higher cost for items), may require additional fees, encourages impulse buying, poor credit harms credit score- reduces ability to use in future.

Q

What are the 3 C’s of Credit?

A

Character- will you repay your debt?
Capital- what if you don’t repay your debt?
Capacity- can you repay the debt?

Q

What are the ways to establish good credit?

A

Establish steady work record, Pay bills promptly, Open a checking account and don’t bounce checks, Open a savings account and make deposits regularly, Apply for a local store credit and make regular monthly payments, Apply for small loan using your savings as collateral, & Get a co-signer on a loan and pay it back as the loans agreed.

Q

What should you look for when shopping for a credit card?

A

Costs- APR, grace period, annual fees, transaction fees, etc.
Features- credit limits, where is card accepted, services available
Look at various credit card companies- just like shopping for clothes
Read and understand contract- know the penalties
Know your cost- make largest payments possible, look at statements