Study Guide Flashcards
inflation
when the prices of everyday objects increase
four different types of goods and services
consumer, business, government, goods/services sold to other countries
two advantages of credit
credit card perks and not needing to carry cash
two disadvantages of credit
paying interest and easy to overspend
credit
the ability to buy goods and services in exchange for payment later
credit history
a record of past payments of credit in the last five years
interest
cost of credit (price you pay to borrow money)
three credit bureaus
equifax, experian, and transunion
one advantage to buying stocks
can make a lot of money
one disadvantage to buying stocks
high risk investment and can lose all the money invested
where can you buy/sell stocks
new york stock exchange (NYSE)
two ways to make money in stock market
capital gains (stock price increases after purchase) and dividends (earnings shared to shareholders)
difference between goods and services
goods are tangible items that can be weighed or measured, while services are tasks that people or machines perform
profit
money leftover after paying expenses
consumer
people that purchase, use, and/or dispose of goods and services
decision-making process
identify the problem. list the alternatives. determine pros and cons. make the best decision. evaluate the decision.
difference between private and public want
private want is individual and provided by businesses. public want is shared by many and provided by the government.
connection between unlimited wants and limited resources
people have never-ending wants, but finite number of resources. competition between businesses
how do consumers affect business
consumers dictate what businesses produce and the price they charge (supply and demand)
types of banks
thrift banks (credit union), commercial banks, retail banks
how do banks make money
interest income on loans and charge fees for the services they provide
five c’s of credit
capacity, character, collateral, capital, conditions
capacity
CAN the borrower repay the loan (paychecks and tax returns)
character
WILL the borrower repay the loan (credit report)
collateral
secondary source of repayment (house, car, investments)
capital
borrower’s “skin in the game” (down payment)
conditions
external or environmental factors
difference between entrepreneur and small business owner
entrepreneur sees need in community and creates innovative product/service to fulfill need. small business owner is just independently owner business.
two advantages of entrepreneurship
satisfaction from taking risks and success/prestige
two disadvantages of entrepreneurship
possible business failure and long hours initially
difference between checking and savings accounts
checking is for everyday use, paying bills, and depositing paychecks. savings are for emergency funds, limited transactions, and can earn interest
two types of id needed to open bank account
photo id (driver’s license/passport) and social security/birth certificate
examples of credit rights
know why you were denied credit, creditors can’t change length or interest rate of fixed-rate loan, and can’t base decision off gender/sex/race
examples of credit responsibilities
know how much you can afford, paying off bill in full at the end of each month, not ignoring credit problems that come up
command economy
government makes all economic decisions on goods/services (Communism)
four factors of production
natural resources, human resources, capital resources, and entrepreneurial resources
sole proprietorship
business owned by one person
corporation
business as a separate legal entity owned by shareholders
equal pay act of 1964
men and women paid same wages for same work
food and drug administration
regulates the safety and efficacy of food, drugs, and biological products
