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| Question | Answer |
|---|---|
| What financial markets do | Purchasing/trading stocks, bonds, commodities, and other financial instruments. |
| Examples of markets | Cryptocurrency markets, derivatives markets, stock markets, bond markets, forex markets, and commodities markets. |
| Influences on the markets | Other countries, the economy, political issues, and government policies. |
| What financial institutions do | Provide services for clients or members so they can save, borrow, or invest their money. |
| The two types of financial institutions, and what they do | Depository institutions manage money deposited in their institution. Non-Depository institutions don’t handle deposits, but act as an intermediary between savers and borrowers. |
| What incentives are | Anything that can encourage specific behavior to help motivate individuals to take specific action. |
| How incentives are used by businesses and the government | To motivate workers and to encourage customers and consumers to buy their products. |
| What money and fiat money are | Used for trading, lending, saving, and investing. The government has deemed something to be money. |
| Functions of money and what they include | Medium of exchange, Unit of Value, and Store of Value. |
| Properties of Money and what they include | Divisible, money should be divided into smaller units. Usable, can be moved from your home to the store. Stable, the same amount of money should be able to be used weekly, monthly, etc. to buy goods/services. |
| Money Supply- What it is and its effect on prices | Total amount of money in circulation in a country. When money supply=production of goods and services, there is no inflation or deflation. |
| Federal budget- What it is along with budget deficit and budget surplus and what they do | Protects the revenue expected to be generated and the costs involved in running the government. When the government spends more than it makes in revenue. When the government gets more revenue than it spends, there is a budget surplus. |
| The purposes for government intervention (Regulation, Protection, Assistance), and what each of them includes | Includes investors, workers, consumers, and the environment. Protection, the legal structure in the United States aimed to protect citizens and businesses. Assistance, the government provides assistance to whoever needs it. |
| What the Federal Reserve System (The Fed) is and does, and its structure and function | Bank of U.S. regulates the U.S. banking system, as well as guiding monetary policy in regards to interest rates, and foreign exchange rates. Consists-Board of Governors and twelve Federal Reserve Banks. Supervises and regulates depository institutions. |
| The role of the Fed in the economy | Regulate the money supply, which is crucial to the stability of the economy. |
| What the goals of the economy are | Economic growth, stable prices, and full employment. |
| What economic indicators are | Statistical values used by the government and private economists to measure economic goals and study the state of the economy. |
| The different economic indicators and what each one does | Gross domestic product, value of all final goods/services produced in a country in a given period of time. Consumer price index, measures cost of a basket of goods/services for urban family. Unemployment rate,% who are currently unemployed. |
| What the different phases are, in order, and what happens in each phase | Expansion, the economy is growing, economic indicators are positive. Recession, period of economic decline for six months. Trough, low point in a business cycle. Recovery occurs after a recession or depression when the economy improves. |
| Government intervention- What the government may do | Reduce taxes, pass legislation to provide incentives to hired workers, and raise interest rates. |
| What the role of trade is, and who are involved in this | Individuals, organizations, and nations trade for things they want and need. |
| Specialization | Tasks are divided among different workers in manufacturing. |
| International trade- what it is and what the benefits are | Exchange of goods and services among nations, benefits are a larger selection of goods, increased competition, and improved standards of living. |
| Why nations trade- The reasons for it, along with what absolute and comparative advantage is | Some countries can produce certain goods more effectively, limited resources. Absolute adv.-country can produce more of a product than another country. Comparative adv.-ability of a country to produce products more effectively at a lower opportunity cost. |
| Balance of trade- What it is along with what trade deficit and trade surplus are | Difference of the value of a country’s imports/exports during a specific period of time. Trade deficit, when a country’s imports exceed the value of their exports. Trade surplus, when the value of a country’s exports exceeds the value of their imports. |
| Free trade and protectionism- What they are and what they include | Free trade believes that international trade works best with free trade, protectionism uses barriers to free trade like tariffs, quotas, and embargos. |
Created by:
Jitendra12
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