Economic Systems
Economy where people own businesses
What is market economy?
A contract that protects you financially from unexpected loss, in exchange for regular payments
What is insurance?
Buying this means you now own a tiny piece of a company—so if they win, you win (a little)
What is a stock?
A website offers brand-name sneakers at 80% off, but only accepts payment through gift cards or wire transfer
What is a scam?
A dishonest trick to take your money that can leave your finances in a sticky mess
What is scam jam?
Government controls production
What is command economy?
The amount you must pay out of pocket before your insurance begins to cover a loss
What is a deductible?
With this financial instrument, you’re not an owner—you’re the one getting paid back, like a lender collecting interest
What is a bond?
A store sells gaming consoles at a loss to get customers in the door, hoping they’ll buy other items at full price
What is Nah - Loss Leader
Money you owe that can become a serious financial danger if not managed properly
What is debt threat?
Combination system
What is mixed economy?
The regular payment you make to keep your insurance policy active
What is a premium?
If you can quickly turn your investment into cash without losing value, it has a lot of this
What is liquidity?
A car dealership advertises a vehicle at a low price, but when you arrive, they say it’s unavailable and push a more expensive option
Nah - Bait and Switch (deceptive)
Fixing mistakes on your credit report to improve your score and financial record
What is Credit Edit?
Consumers control production decisions
What is consumer sovereignty?
This type of auto insurance covers damage or injury you cause to other people and their property—and is required by law in most states
What is liability auto insurance?
The bigger the gamble you take in investing, the higher this potential payoff usually is
What is a return?
An app offers a “free trial,” but requires your card and automatically charges you monthly if you don’t cancel
What is Nah - deceptive practice
Keeping extra money stored safely in a savings account instead of spending it
What is a cash stash?
Limited resources create this problem
What is scarcity?
You hit a deer while driving, causing major damage to your car. This type of insurance covers that damage
What is comprehensive insurance?
Putting your money into different types of investments instead of just one, so a single bad choice doesn’t wipe you out
What is diversifying (Diversification)
An investment guarantees high returns with little or no risk and relies on bringing in new investors to pay earlier ones
What is a Scam - Pyramid Scheme
The cost of borrowing money over time, shaping your financial destiny
What is rate fate?