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23 Cards in this Set
- Front
- Back
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What is included in a business cycle
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eriods of expansion and contraction (including recessions)
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How is the economies productivity measured?
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gdp
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When is an economy unstable?
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When it grows to fast or too slowly
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In addition to GPD what also measures economy productivity?
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the rates of employment and unemployment,
the value of currency (the consumer price index). |
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If an economy produces little that anyone wants
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, then its currency has little value relative to other currencies because there is little use for it in trade
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Financial planning is a recursive process that involves
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defining goals,
assessing the current situation, identifying choices, evaluating choices, choosing. |
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Choosing further involves
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ssessing the resulting situation, redefining goals, identifying new choices, evaluating new choices, and so on.
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feasible choices
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feasible choices by calculating the benefits, explicit costs, implicit costs, and the strategic costs of each one also risk
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What are wages
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Income from employment
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Interest
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Income from lending
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dividend
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income from owning stock
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draw
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income from a partnership
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How do you address a deficit?
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increasing income, reducing expenses and borrowing
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What is the disadvantage of borrowing
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interest
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How do you deal with surpluses
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spending more, saving and investing (lending)
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sunk costs
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resources used and cannot be brought back
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opportunity cost
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The cost of not using the next best alternative
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Buying capital or borrowing capital
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gets you things faster
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Liquidity has value because4
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it enables choice
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Time
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distance or delay from liquidity
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Distance or delay
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creates risk and opportunity costs
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Time affects value
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by creating distance, risk, and opportunity costs.
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Time discounts
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value
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