Supply and Demand
What is the law of demand?
As price decreases, quantity demanded increases, and vice versa.
What is a budget?
A plan for managing income and expenses over a specific period of time.
What is a stock?
A share of ownership in a company.
What is credit?
The ability to borrow money or access goods or services with the understanding that payment will be made later.
What is GDP?
Gross Domestic Product, a measure of the economic performance of a country.
What is supply curve?
A graphical representation showing the relationship between price and quantity supplied.
Name one fixed expense.
Rent or mortgage payment.
What is a bond?
A fixed income investment where an investor loans money to an entity for a defined period at a fixed interest rate.
What is a credit score?
A numerical representation of a borrower's creditworthiness.
What does CPI measure?
Consumer Price Index, which measures the average change over time in the prices paid by consumers for goods and services.
How does a price decrease affect demand?
Typically, a price decrease leads to an increase in quantity demanded.
What is the 50/30/20 rule?
A budgeting guideline that allocates 50% of income to needs, 30% to wants, and 20% to savings and debt repayment.
Explain the concept of diversification.
Spreading investments across various assets to reduce risk.
How can one improve their credit score?
By paying bills on time, reducing debt, and avoiding new hard inquiries.
Define unemployment rate.
The percentage of the labor force that is jobless and actively seeking employment.
Define market equilibrium.
The point where the quantity supplied equals the quantity demanded.
How do you calculate total expenses?
By adding all fixed and variable expenses over a specific time frame.
What are mutual funds?
Investment programs funded by shareholders that trade in diversified holdings and are professionally managed.
What are the risks of high-interest debt?
Increased financial burden, potential for bankruptcy, and damage to credit score.
What is fiscal policy?
Government policy regarding taxation and spending to influence the economy.
What is a shift in supply?
A change in the supply curve due to factors other than price, such as production costs or technology.
What is an emergency fund?
What is compound interest?
Interest calculated on the initial principal and also on the accumulated interest from previous periods.
What is the difference between secured and unsecured debt?
Explain the significance of the trade balance.
It measures the difference between a country's exports and imports, indicating economic health and foreign demand.