Super Extra Special Wonderful Section

Question 1

Shareholders

Answer 1

group of owners of a corporation

Question 2

Publicly Held Company

Answer 2

Owned by THOUSANDS who trade shares among public stock exchange
Large Business

Question 3

Privately Held Company

Answer 3

Owned by SMALL # of ppl who know each other
Small Business
Start off as this, grow to public

Question 4

Inflation

Answer 4

Too much money not enough stuff
Ebay
Shortage of goods so prices go up

Question 5

Deflation

Answer 5

Too much stuff not enough money
TJ Maxx
Abundance of goods that ppl don’t buy

Question 6

Equilibrium Point

Answer 6

Product demand = product produced
Supply = demand
No abundance, no shortage

Question 7

When lots of people want stock the price is _________

Answer 7

Driven up

Question 8

When more people want to sell stock than buy it, prices __________

Answer 8

Go down

Question 9

Stock prices will rise when a company….

Answer 9

Reports
- Good earnings
- New product
- Merges with another company

Question 10

Stock prices will decline when a company….

Answer 10

Reports
- loss in earnings
- announces reorganization that will reduce profits

Question 11

Quotation

Answer 11

Purchasing price of a stock at a particular time

Question 12

NYSE ?

Answer 12

New York Stock Exchange = largest security market

Question 13

NASDAQ

Answer 13

National Association of Securities Dealers Automated Quotations = technology market

Question 14

Dow Jones

Answer 14

Average price of 10 selected industrial stocks used as a measure for general market trends

Question 15

Bull Market

Answer 15

Stock prices rising
Bull shoots up

Question 16

Bear Market

Answer 16

Stock prices dropping
Bear throws down

Question 17

A bull expects _____

Answer 17

prices to rise

Question 18

A bear expects ______

Answer 18

prices to drop

Question 19

3 main sectors of US market economy

Answer 19

Businesses, households, government

Question 20

Business IN

Answer 20

Services + Products

Question 21

Business OUT

Answer 21

Expenses + Taxes

Question 22

Household IN

Answer 22

Wages + Payments

Question 23

Household OUT

Answer 23

Consumption + Taxes

Question 24

Government IN

Answer 24

Taxes

Question 25

Government OUT

Answer 25

Services + Expenses

Question 26

Commercial banks report to ______

Answer 26

The Federal Reserve

Question 27

Federal Reserve has _____ banks

Answer 27

12

Question 28

Federal Reserve is controlled by ______________ which are _______________.

Answer 28

- the Board of Governors of the Federal Reserve - appointed by the president and congress

Question 29

Board of Governors is made up of

Answer 29

Open Market Committee and Advisory Council

Question 30

Fiscal Tool

Answer 30

GOVERNMENT slow to work

Question 31

Monetary Tool

Answer 31

FED RESERVE can happen quickly

Question 32

Expansionary Tool

Answer 32

INCREASE # of money in circulation inflate balloon

Question 33

Contractionary Tool

Answer 33

DECREASE # of money in circulation deflate balloon

Question 34

Fiscal Expansionary Tools:

Answer 34

1. Increase government spending (puts more $ in) 2. Cut taxes (more $ to spend)

Question 35

Monetary Expansionary Tools:

Answer 35

1. Open market operations - securities + bond purchases - Reserve buys back bonds so more $ is in economy and not sitting in a bond 2. Decrease interest rate (borrowing $ is cheaper) 3. Decrease Reserve Requirements

Question 36

Fiscal Contractionary Tools:

Answer 36

1. Decrease government spending 2. Raise taxes

Question 37

Monetary Contractionary Tools:

Answer 37

1. Open market operations - securities and bond sales - sells bonds to collect $ from circulation 2. Increase the interest rate (borrowing $ is more expensive) 3. Increase Reserve Requirements

Question 38

Reserve Requirements

Answer 38

Amount of physical money a commercial bank is required to keep in the actual bank

Question 39

Money goes INto a bank through:

Answer 39

Deposits, payments, interest + fees

Question 40

Money goes OUT of a bank through:

Answer 40

Withdrawals, loans, expenses, and interest/payments

Question 41

Bank expenses can only be paid for with _______

Answer 41

Gross profit

Question 42

Gross profit

Answer 42

Money the bank actually has NOT money the bank is borrowing from people who have put $ into the bank

Question 43

Loans have ________ and ___________

Answer 43

Principle Interest

Question 44

Principle (loans)

Answer 44

Amount of payment actually owed that was borrowed

Question 45

Interest (loans)

Answer 45

"Thank you" to the bank for letting me borrow money