Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
EconomicsUnit 4 TEST
| Question | Answer |
|---|---|
| What is the Civilian Labor Force? | Civilian Men and Women (16 years old and over) who are actively looking for a job or is currently working. |
| What are the Categories of Labor? | Unskilled Semiskilled Skilled Proffessional |
| What does being "unskilled" mean in the Categories of Labor? | No training is required to do that job. |
| What does being "semi-skilled" in the categories of labor mean? | You can operate easy machinery. |
| What does being "skilled" in the categories of labor mean? | you can use complex equipment and need little supervision... Example: Carpenters) |
| What does being a "professional" in the categories of labor mean? | They use higher-level skills (Lawyers) |
| Why don't the categories of labor compete against each other? | -Cost of education and training -Lack of oppertunity-cannot get training where the person lives. |
| Why do the wages differ in the different categories of labor? | -traditional theory of wage determination:supply and demand for a workers skills and services determine the wage or salary. -Theory of Negotiated wages: organized labor can determine wages through collective bargaining. (and Signaling Theory) |
| What is signaling theory? | Employers are willing to pay more for people with more degrees or certifications. |
| What is Regional Wage differences? | -Labor may not want to move out of a region. -Cost of living in an area may be higher than in other areas so wage need to be higher for people to live in the area. -a location may be popular so people will take a lower wage to work there. |
| What is "Saving"? | saving is the absence of spending. |
| What are "Savings"? | the dollars that become available when people abstain from consumption. |
| What is a "Financial System"? | An organized way to transfer savers dollars to investors- when people save the money is used by business to buy capital. |
| Non-bank financial intermediaries are... | Finance Company Life insurance Company Mutual Funds:a company that sells stock in itself to individual investors and then invests the money it receives. Pension Funds: collect money from employees, invest the money and disperse the money to retired me |
| What are "Financial Assets"? | -Bond or IOU -a claim on the property and income of a borrower. |
| Certificate of Deposits (CD): | Loans investors make to a financial institution. |
| What is a "Money Market Mutual Fund"? | when small investors put their money in the fund and then the fund loans the money in the form of "CD"'s to other borrowers. |
| What are the Markets for financial assets? | -Capital -Money -Primary -Secondary |
| Capital Market | where money is loaned for periods of more than one year. |
| Money Market | Where money is loaned for less than one year. |
| Primary Market | Where only the original issuer can redeem, the financial assets (Savings bonds and IRA's) |
| Secondary Market | Where existing securities can be bought and sold (Stock Market) |
| Simple intrest | The intrest computed only on the principle, the amount that you borrow |
| Compound intrest | the type of interest that adds last year's interest to the principle before calculating this years interest. |
| Efficient market hypothesis | -Weak version:prices reflect past prices -Semi-strong version:public information reflects price -Strong version:all information public & private reflects in the price |
| Organized Stock Exchanges | Securities Exchange NYSE (New York Stock Exchange) ASE (American Stock Exchange) |
| Securities Exchanges | places where buyers and sellers meet and trade securities. |
| NYSE (New York Stock Exchange) | largest, most profitable, publicly traded companies. |
| ASE (American Stock Exchange) | smaller and more speculative than whet are on NYSE |
| Over the counter market | Totally electronic market- for securities that are not listed or traded on an organized exchange. (NASDAQ) |
| Dow Jones average | based on largest 30 stock exchanges in NYSE |
| Standards and Poors 500 | based on the largest 500 stocks traded on the NYSE, AMEX, OTC markets |
| Futures Market | contract to buy or sell at a specific date in the future at a price specified today. |
| Options Market | someone pays someone up front to get out of the deal made. |
| What is NET WORTH? | The difference between assets and liabilities. (assets/liability) |
| what is a budget? | The amount of money you can spend in a specific period. |
| What is discretionary spending? | money that can be spent on whatever one desires. |
| What is the rule of 72? | take interest rate -> divide into 72 -> get how long it will take for your wages to double. |
| What is dollar cost averaging? | a long-term technique used by investors who purchase an equal dollar amount of the same stock at equal intervals |
| What is Asset Allocation? | diversification determining the percentage of assets in asset classes |
| What is a wealth-creating Asset? | a possession that generally increases in value or provides a return. (ex: Savings account, Retirement plan, Stocks and bonds,a house) |
| Non-wealth-creating *or just ASSETS* | dont rise in value (Car, Big Screen TV, Boat, and clothes.) |
| What is another name for LIABILITY? | Debt... money you owe. (home mortgage, credit card balance,car loan, medical bills, and student loans.) |
| What are two ways a person can make money on Stock? | -Dividends:an income distribution by a corporation to its shareholders, usually made quarterly. -Appreciation:an increase in the value of stock in the company, generally based on its ability to make money and pay a dividend. |
| Traditional IRA | not taxed until it is withdrawn |
| Roth IRA | taxed until it is withdrawn |
| Ownership interest in an ASSET after any debts on the item are deducted. | Equity |
| What is an ADVANTAGE and DISADVANTAGE of a Mutual Fund? | ADVANTAGE-you become a shareholder of a fund that has invested in many other companies (Allows you to diversify) DISADVANTAGE: have to pay management fees. |
| What information do you need in order to make a budget? | -calculate your monthly income. -track your daily expenses -determine how much you spend on monthly bills |
| what is the relationship between risk and reward? | the higher the risk of losing money, the higher the expected return. for less risk an investor will expect less return. |
| What is a credit report and why is it important to have a good rating? | -A credit report shows everything about their payment history, including LATE payments. -Banks and other lenders use credit reports when deciding whether to loan money to them or not. |
| What things should you take into consideration when determining how much risk to take? | -Inflation Risk -Time Horizon -Financial Risk Tolerance -Financial Goals |
| What is INFLATION RISK? | risk that your rate of return is less than what you invest. |
| What is TIME HORIZON? | the longer you have to achieve goals, the more risks you can take. |
| What is FINANCIAL RISK TOLERANCE? | how much of a risk you are willing to take. |
| What are FINANCIAL GOALS? | how much risk you need to take in order to achieve your goals. |
| How can a person reduce the interest expense on a loan? | -Have a good credit rating -Increase your monthly payments |
| GROSS PAY: | the total amount of money earned before any deductions are made. |
| NET PAY:(disposable income) | The amount left after all deductions are taken out of the gross pay. |
| Mandatory deductions: | -Federal income tax -State income tax -Local income tax |
| What does the idea of PAY YOURSELF FIRST mean? | set aside money from your disposable income to put into your savings plan. |
| What is a VARIABLE EXPENSE? | -ones that are likely to change in the short term |
| What is a FIXED EXPENSE? | -hard to change on a short term. |
| What is Disposable Insurance? (FDIC) | to make sure that customers do not lose money if bank fails |
| What is CREDIT? | Obtaining the use of money you do not have. |
| What are ADVANTAGES and DISADVANTAGES of Credit? | Advantage: it allows you to pay/use a good or service today and pay for it later. Disadvantage:Loans MUST be repaid. Lenders charge interest for the use of their money. |
| What do lenders look for when they approve a loan to an individual? | -Character -Capacity -Collateral |
| what does it mean to DIVERSIFY investments? | Don't put it all in the same place |
| FINANCIAL RISK? | The risk that the business or government will not be able to return your money, much less pay a rate of return. |
| MARKET RISK? | the risk that the price of an investment will go down. |
| LIQUIDITY? | the ability to turn your money into cash or spendable funds, such as your checking account. |
| INFLATION? | the risk that can decrease the value of your investment. |
| FRAUD? | occurs in securities and saving schemes that do not involve banks, savings and loans, credit unions and brokerage firms. |
| ANNUAL RATE OF RETURN: | return is stated as a percentage of the amount invested -usually calculated on a yearly basis. |
| REAL RATE OF RETURN: | The normal rate of return minus the inflation rate. |
| How does insurance work? | it replaces the best stuff. |
| What is a premium? | a fee payed by costumers to provide costumers to provide protection against certain types of losses. |
| What is a DEDUCTABLE? | the amount you have to pay out of your pocket, the threshold until your insurance company kicks in. |
| (AUTO) COLLISION INSURANCE: | provides for the repair or replacement of the policy damaged in an accident. |
| (AUTO) LIABILITY INSURANCE: | Covers the cost of damage to auto as result of fire, theft, or storms. |
| (HEALTH) BASIC HEALTH INSURANCE: | covers office visits, laboratory,hospital costs and routine care. |
| (HEALTH) MAJOR MEDICAL INSURANCE: | Protects against large bills from catastrophic illness or injury. |
| Renter's: | reimburses policy owner for loss of possessions in rental unit due to fire; theft, or water damage. |
| Homeowner's: | Physical damage:for fire or water damage to house or other stuctures on property. Loss or theft:for personal property damaged or stolen. Liability:protects against loss from a lawsuit for injuries to invite or uninvited guests |
| Disability: | policy owner selects a replacement income for lost wages if an illness or accident prevents the person from working. - disability income is paid for a specified time after a waiting period. |
Created by:
1079194417
Popular Business sets