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22 Cards in this Set
- Front
- Back
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the price of gas and oil is
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linked to all prices. linked to science
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all material wealth is created by
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moving things around (rearranging)
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to increase wealth,
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change something. material put back together in different forms
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work and energy
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work must be expanded to move things around.
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cost of labor is
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part of material wealth
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creation of all material wealth requires
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energy
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stock market
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share of ownership in a company
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2 means of putting money into the stock market:
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buy bonds or stocks
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2 methods of investing
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invent and speculate
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the stock market consists of people who
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have an idea and need people with money to make it a reality
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shareholders are
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owners of companies
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bonds
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a loan. borrowed money that has to be paid back with interest.safer and a smaller potential reward. fixed. bondholders get paid off first if a bankruptcy of the company occurs
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stocks
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ownership of a company. risk is greater; greater potential to move forward and greater reward.
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investing
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investor seeks income. looks for company looing for wealth
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speculator
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tries to make money through changes in prices. interest in price of stock. sell high buy low
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long run
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determine direction of stock market. relationship between what a person could earn investing in stocks as oppossed to bonds
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on avg. return from stocks is
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60 percent more than high cooperate bonds get
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percent of stock you invest is always
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greater than interest on bonds
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money will flow to
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where there is a better deal. tends to even out
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investors:
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determine economic fundamental trend to the stock market. compare yeilds of stock market and bonds
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bonds adjust for
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inflation. raises everything
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bonds are stable due to
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stable interest rate: controlled by the federal reserve bank
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