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Economics
| Question | Answer |
|---|---|
| LEADING ECONOMIC Indicator | ADVANCED Warning Housing Starts. Keep track or pay attention: This is a LEADING ECONOMIC INDICATOR Other activities will be happening down the road if there are more house starts. |
| Lagging Economic Indicator | Bankruptcies...happens at the end of whatever....caused it. |
| Federal Budget Deficit | The shortfall between what the government took in and what they spent They issue dept to make up the difference |
| Median | the MIDDLE Value |
| NBER | National Bureau of Economic Research |
| GDP | Gross Domestic Product Total Value of Goods and Services |
| The Stock Market | S&P 500 Index Dow Jones Industrial Average (Top 20 Companies) NASDAQ: growth stocks & tech stocks |
| How the Government Spends its money | SS: Flat Medicare: UP |
| Government Debt | Total of what they owe If over total GDP:BAD US is the GOLD standard of Debt: we pay lower interest |
| US Merchandise Exports | What we sell to other companies China: biggest Mexico: 2nd Biggest |
| US Imports | 16% comes from China Mexico |
| Where is the world economy growing? | |
| BRIC | Brazil Russia India China |
| US Dollar Value | |
| CPI | Consumer Price Index Take a basket of goods a consumer usually buys, and track if the total of all of them are increasing or decreasing |
| Economic Data Points | Hshold Income Car and Home Sales Interest Rates: Mortgage Rates, 10yr Treasury (Government Bonds), Federal Funds Rate (Rate offered by Federal Reserve System to Banks) Stock Market Personal Income Growth Employment/Unemployment Rates Gas and Oil |
| Price Elasticity | Buyers sensitivity to changes in price is called elastcity. if the price goes up, how much does the purchasing activity change Meat NON Elastic: formula |
| Fixed vs. Variable Expense Structure | Fixed: Go for volume, need revenue, need to market, advertise Airline: fill the seats, you are flying anyway Variable: Manage your margin Pay VERY CLOSE attention to Cost more than growing your business. When it cost you more, STOP (Caterer: # Events) |
| 4 Major Macro Drivers: Big, Global, Long term | Rise of middle class in BRIC: Brazil, Russia, India, China Scarcity of RM&Resources Dynamic environ. for manufac&sourcing (due to higher transport cost, wage expectations) Interdep Financial markets: technology&globalization has connected everything |
| Elasticity Formula for Qty Demand | %chg in Qty demand/%Chg price |
| Elasticity Formula for Total Revenue | %chg in Revenue/%chg Price |
| Maximize Total Profits | by maximizing revenues and minimizing cost. MR>MC Marginal Revenues must >=Marginal Cost in order to not lose money |
| Total Cost | =Variable Cost per Unit * Units sold + Fixed Costs |
| Unit Contribution | =Selling Price-Variable Cost |
| Break Even | Fixed Costs/ Unit Contribution |
| Target Profit Volume | (Fixed Costs + Target Profit)/ Unit Contribution |
| Recoup Investment | Initial Investment/Profit Ex. $212000/$30000=7years |
| Exchange Rate | The rate at which one country's currency s converted into another's |
| 4 Key Factors for International Currency Traders | 1. Trading demands for currency to pay for goods and services 2. demands for currency for attractive investments 3. Demands for a safe Haven in times of Uncertainty 4. Lower inflation relative to other countries |
| Futures and Options | Buying "security" to offset or HEDGE losses on currency transactions. |
| Country Analysis | 4 step process that attempts ot organize all available economic,social, polititcal, and geographic data for strategy development. |
Created by:
thopwood
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