Money Talks
This institution is responsible for controlling the money supply, maintaining price stability, and acting as a lender of last resort.
What is “the central bank”?
This occurs when the quantity demanded equals the quantity supplied at a particular price.
What is “market equilibrium”
This measures the percentage of the labor force actively seeking work but unable to find it.
What is “the unemployment rate”?
The portion of your income that is not spent and is set aside for future use is called this.
What is “savings”?
This is the ownership share in a company that can be bought or sold on a stock exchange.
What is “a stock”?
The total amount of money in circulation in an economy, including cash and checking deposits, is called this.
What is “money supply”?
If the price of a complement good rises, the demand curve for the related good shifts in this direction.
What is “to the left (decrease in demand)”?
Fiscal policy uses these two tools to influence the economy.
What are “government spending and taxation”?
A credit score measures this aspect of your financial behavior.
What is “creditworthiness” or “ability to repay loan"?
This type of fund pools money from multiple investors to buy a diversified mix of stocks, bonds, or other securities, and is actively or passively managed.
What is “a mutual fund”?
Using your money to buy assets that can grow in value over time, such as stocks or real estate, is called this.
What is “investing”?
When a subsidy is given to producers, it shifts this curve and causes equilibrium price to do this.
What is “the supply curve shifts right and equilibrium price decreases”?
A sudden decline in spending and investment during a business cycle can trigger this.
What is “a recession”?
The total cost of borrowing on a loan, including interest and fees, expressed as an annual percentage, is called this.
What is “annual percentage rate (APR)”?
A stock that consistently pays a portion of its earnings to shareholders is called this.
What is “a dividend stock?
The annual interest rate that takes into account compounding over a year is called this.
What is “annual percentage yield (APY)”?
When the government sets a minimum price above equilibrium, the resulting surplus is measured as this.
What is “excess supply”?
This law states that, all else equal, as the price of a good rises, quantity demanded falls.
What is “the law of demand”?
The method of calculating interest where interest is earned on both the principal and previously earned interest is called this.
What is “compound interest”?
A measure of an asset’s return variability, often used as a proxy for risk, is called this.
Answer: What is “volatility”?
When the price of goods and services rises across the economy, the purchasing power of money decreases. This phenomenon is called this.
What is “inflation”?
For a good with perfectly inelastic supply, an increase in demand affects the price and quantity in this way.
What is “price increases, quantity remains constant”?
The cost that does not change with the level of output is called this.
What is “fixed cost”?
A mortgage that allows you to make payments interest-only for a period before paying principal is called this.
What is “an interest-only mortgage”?
A debt security issued by a government or corporation that pays interest over time is called this.
What is “a bond”?