Unit Four Flashcards
Economic
Fiscal
something that relates to government money or public money
Capitalism
an economic and political system in which a country’s trade and industry are controlled by private owners for profit
Macroeconomics
the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.
Microeconomics
the part of economics concerned with single factors and the effects of individual decisions
Quota
financial criteria such as gross margin or contribution to overhead
Interest
The price paid for borrowing money. It is expressed as a percentage rate over a period of time
Capital
cash or liquid assets being held or obtained for expenditures
Liquid Asset
cash on hand, cash on bank deposit, and assets that can be quickly and easily converted to cash.
Fixed Asset
a tangible piece of property, plant, or equipment (PP&E) that you own or manage with expectations that it’ll continuously help generate income
Yield
how much income an investment generates, separate from the principal.
Taxes
mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.
Investment
the action or process of investing money for profit or material result.
Budget
an estimate of income and expenditure for a set period of time.
Debt
something, typically money, that is owed or due
Loan
a thing that is borrowed, especially a sum of money that is expected to be paid back with interest
Economic: Rising inflation rates have significant implications for both macroeconomics and microeconomics, affecting everything from national productivity to individual purchasing power. As prices increase, the interest rates on loans often rise, making borrowing more expensive and slowing down investments. This can lead to a reduction in capital available for businesses, impacting their ability to expand or maintain operations. On a broader scale, governments may need to adjust fiscal policies to manage the economic strain, which could include changes to taxes or public spending. These adjustments can have ripple effects throughout the economy, influencing both market dynamics and consumer behavior.
- What is one potential effect of rising inflation rates mentioned in the paragraph?
A. It may lead to adjustments in fiscal policies, including changes to taxes or public spending. (correct answer)
B. It decreases the interest rates on loans, making borrowing cheaper.
C. It increases the amount of capital available for businesses to expand.
D. It eliminates the need for governments to manage economic strain through policy changes.
