| A | B |
|---|
| The three basic economics questions every society must answer. | What to produce, how to produce, and for whom to produce. |
| Monopoly | A firm that is the sole producer of a product or service without close substitutes. |
| Monopolistic competition | A market structure in which many firms sell products that are similar, but not identical. |
| Examples: roads, schools, National Defense | Public goods |
| Fiscal Policy | Taxes and spending are tools Congress uses to implement ___ ___. |
| The Federal Reserve | Carries out monetary policy. |
| Budget | A spending and savings plan based on your income and expenses which meets your wants and needs. |
| Develop a ___ and start investing as soon as you can. | budget |
| Unemployment | Considered by the government as someone not working and actively looking for jobs. |
| Expansion | This stage of the business cycle is the best time to look for work. |
| Example: Christie likes Lindt chocolate which is made in Switzerland. She buys it at a store in Fair Oaks Mall. The chocolate is considered an ___. | Import |
| Trade surplus | When a country exports more than they import. |
| Example: If a ___ is placed on imported hats, the price of hats will increase. | Tariff |
| The ___ is an agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. | NAFTA |
| Quota | Placing limits on the quantity of a good that can be imported. |
| Examples: downloading a song from iTunes for $1.29, buying a Pepsi from the vending machine, purchasing a new lawn mower | Gross Domestic Product |
| Foreign Exchange Rate | The price of one country's currency in terms of another country's currency. |
| A ___ U.S. dollar means that it will buy a relatively small amount of foreign currency, and a ___ U.S. dollar will buy a relatively large amount of foreign currency. | weak, strong |
| Entrepreneur | An individual who initiates, creates, and manages a new business. |
| Franchise | A legal contract that gives you the right to use a company's trademark or trade name, business system and processes to produce and market a good or service in a specific geographic area. |
| Example: The price of coffee dramatically increases; consumers start drinking more tea. Tea is therefore considered a ___. | Substitute |
| Example: An increase in the cost of milk causes a decrease in demand for cereal. | Complement |
| Example: If the price of a sweater goes up, the quantity demanded for the sweater will decrease. | Law of Demand |
| Example: As the price of bottled water goes down, the quantity supplied will decrease. | Law of Supply |
| Elasticity | Used to measure how much demand for a product changes when the price changes. |
| Example: If the price of sugar changes by 3% and the quantity demanded changes by 3%. | Unitary elasticity |
| Example: Sunny's market sells laundry detergent and is currently running a sale of two products of different sizes. The ___ ___ would determine the best price of the two sizes. | Unit price |
| Net Worth Statement | A snapshot of the current value of your assets and liabilities. |
| Example: Macy’s credit card | Liability |
| Liquidity | The term used to describe the ease and speed with which you can convert savings or an investment to cash. |
| supply and demand for the stocks | The price of stocks traded on exchanges is determined by _______. |
| Initial Public Offering | The first sale of stock by a private company to the public. |
| Blue Chip Stock | Stocks that are part of well-established companies that have strong records of being successful. |
| Bond | Represents a loan to a company. |
| Example: Ms. Marquet owns stock in Nike. Nike made a sizable profit and plans to share the profit with the shareholders, including Ms. Marquet. The share of the profit that Ms. Marquet receives is called a ___. | Dividend |
| CExample: Ji Hwan bought 10 shares of Apple stock for $90.00 per share. He sold it for $104.25 per share. The difference between his selling price and the purchase price is called ___ ___. | Capital Gain |
| Transaction fee | A flat fee that you pay each time you buy or sell stock. |
| Example: “Investors Believe the Market is Headed Downward” - The New York Times | Bear Market |
| Example: If you borrow $25,000 from XYZ Bank to purchase a car, the $25,000 is referred to as the ___. | Principal |
| Interest rate | The cost to use someone else's money for a period of time and expressed as a percentage. |
| Rule of 72 | To estimate how long it will take to double your investment. |
| Anticipated income | Salary, wages, and allowances which you receive regularly. |
| Mandatory withholdings from your paycheck | Federal Taxes, Medicare, Social Security |
| Example: A house payment, such as monthly mortgage or rent, and a car payment. | Fixed expense |
| Example: Buying food for your family, and entertainment, such as going out to the movies. | Variable expense |
| Example: Arron is filling out a form that walks him through the calculations of his taxes for the prior year. When he is finished, he will submit his form to the government. | Tax return |
| Example: Kimberly donated $5,000 to the Make-A-Wish Foundation and two other charities. When she is filing her taxes, these donations lower the amount of taxable income. | Tax deduction |
| Sales tax | Tax added to the cost of a product at time of purchase. |
| Examples: tobacco, gasoline, alcohol | Excise tax |
| Estate taxes | Taxes on property and assets that will be inherited |
| Payroll taxes | Taxes on worker's earnings paid to the government by their employers. |
| Income taxes | Taxes you pay on most income you receive. |
| IRS | A federal agency responsible for collecting income taxes. |
| Dependents | People you support financially for tax purposes. |
| Example: When you drive a brand new car off the lot. | Depreciation |
| Example: Lindsay is graduating high school and wants to start banking on her own. She would like an institution with a wide variety of services including mobile and on-line banking. She is not sure where she is going to college in the fall, but wants to know that the institution has many locations nationwide and numerous ATMs around town. | Commercial bank |
| Federal Deposit Insurance Corporation | Insures accounts in commercial banks. |
| Creditworthiness | An assessment (character, capacity, capital, conditions and collateral) used by creditors to rate the likelihood that a borrower will default on their debt obligation. |
| Considerations when purchasing a car | Cost of maintenance, sales and property tax, and insurance costs |
| The amount is immediately deducted from your bank account. | Debit card |
| Reconciliation | The process of matching your checkbook register with your bank statement. |
| A savings account earns the greatest amount of money when the interest on the account is compounded: | daily |
| Certificate of Deposit | A savings instrument that requires a deposit for a specific period of time during which there is a penalty for withdrawal. |
| Example: Jordan bought land in Stafford County to build a retirement home for his parents. He will need a loan to help him with this major purchase. The loan is called a ___. | Mortgage |
| Fraud | Dishonest business practices that are meant to deceive, trick, or gain an unfair advantage. |
| Shred personal documents, use difficult PIN numbers, and have mail deposited to a post office box. | Ways to protect your personal information |
| Will | A legal document that tells how an estate is to be distributed when a person dies. |
| Example: You are listed in a legal document as the person who will receive your aunt’s valuable fidget spinner upon her death. | Beneficiary |
| Personal Property Inventory | A document that lists the valuable things you own. It used as proof of loss in the event of a fire. |
| Example: Someone breaks into your home and steals your flat screen television. You are covered. | Renter's insurance |
| Who is more likely to pay the most for their insurance? | teenager |
