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43 Cards in this Set

  • Front
  • Back
partial ownership of a company
a loan, corporate bond= a loan to a corporation
mutual funs
people invest in these and managers pool all of the money together to invest in a pool of stocks
New York Stock Exchange, oldest and most established place where stocks are traded
largest stock market in America, all done over computers, technology heavy
S & P 500
index of largest 500 companies that are traded
growth stocks
high P.E. ratio, >40
value stocks
low P.E. ratio, 15<
measurement of volatility
P/E ratio
price per share/earnings per share, (high/low=high, expensive and low/high=low, cheap) market expectations of the future of a company.
par value (bond)
amount of the loan
percentage you get back each year (interest)
bond rating
AAA=treasury, investment grade, junk bonds= CCC-D= high risk, high return
annual percentage return on your investment
premium/discount bond
bond is being sold at a lower value than its par value/ bond is being sold at higher than its par value
amount of money a company pays its stock holders
stock agent
municipal bond, a bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks and schools
products that are the same no matter who produces it, such as petroleum, notebook paper or milk
capital gain
the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the seller
bull/bear market
steady rise in stock market price/steady drop in stock market price
futures contract
a contract to buy or sell at a specific date in the future at a price specified today
Three Key Economic Questions
-What goods and services should be produced?
-How should these goods and services be produced?
-Who consumes these goods and services?
an alternative we sacrifice when we make a decision
traditional economy
economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services
market economy
economic system in which decision on production and consumption of goods and services are based on voluntary exchange in markets
centrally planned economy
economic system in which the central government makese all decisions on the production and comsumption of goods and services
production possibility frontier
the line on a production possibilities graph that shows the maximum possible output for a specific economy
equilibrium price
the price of a good at which the quantity demanded and the quantity supplied are eqaul
the amount of goods available
the desire to own something and the ability to pay for it
unitary elastic
describes demand whose elasticity is exactly equal to 1
shift in demand
-consumer expectations
-consumer tastes and advertising
-prices of related goods (complements and substitutes)
shift in supply
-change in production costs
-change in technology
-government policy
-natural disaster
when less than enough of a good is produced
when more than enough of a good is produced
two goods that are bought together
goods used in place of one another
economic efficiency
making the most of resources
economic freedom
freedom from government intervention in the production and distribution of goods and services
economic security
assurance that goods and services will be available, payments will be made on time, and a safety net will protect individuals in times of economic disaster
economic equity
fair distribution of wealth
economic growth and innovation
innovation leads to economic growth, and economic growth leads to a higher standard of living