Basics of Econ
The idea that your wants are unlimited but the resources to meet those wants are LIMITED
Scarcity
Buy now pay later system used by Millions
Credit
The economic theory that the government should stay out of the economy and that the economy will regulate and drive itself, created by Adam Smith, a big part of the American Economy.
The Invisible Hand Theory.
How can you explain Microeconomcs vs Macro
Macro-Big picture, nationwide economic solutions and theories GDP, development etc.
Micro-Individuals and Firms and their impact on the economy. Small picture.
The agency that enforces, processes and governs over tax law and regulations in the USA.
IRS
Act of giving up one benefit in order to gain another greater benefit
Trade Offs
VIN stands for what in your car?
Vehicle Identification Number
Explain Keynesian Economics breifly.
Government must step in to prevent and reset economic recessions
What is the Business Cycle?
A period of macroeconomic expansion followed by a period of Macroeconomic contraction
Taxes that go up as you make more money
The smallest, most relevant thing you sell or service (Dealership=One car sold)
Unit
What is the commonly used name for Home Loans
Mortgages
Explain Reagan-omics and Trickle down economics
Tax cuts for the wealthy allow the money to circulate through the economy to the lower classes. People spend and work more when they are taxed less.
When things get more expensive, but the value and purchasing power of the dollar has shrunk, what is that called?
In extreme cases?
Inflation
Hyper Inflation
What do your Tax Dollars mostly go to in the United States
Social Security.
A Country has two choices: Guns or Butter. What does this mean
A nation can focus there economy on Guns-Military and Government Spending
or Butter-Consumer Goods
Your Financial Report Card
-Payment History
-Loan History
-Bank Accounts
-Credit Accounts
-Also a Tax report…
Can help you get loans, other types of credit etc. but can also prevent you from achieving financial freedom, if a hard credit pull happens this can hurt your credit score...
In Keynesian Economics, what are Automatic Stabilizers and what are they supposed to do?
tools of fiscal policy that increase or decrease automatically with changes to GDP or personal income
Policy of allowing consumers or producers to buy or sell goods abroad just as cheaply and easily as buying or selling domestically
Free Trade
Bear Markets vs Bull Markets
Bear Market-Trending Down
Bull Market-Trending Up
What is the difference between these types of economies
Market
Command
Mixed Market
Market-Invisible hand, no government influence, consumer/producer driven
Command-State controlled, no freedom of choice
Mixed Market, blend of both...
Explain
Variable Rates
Fixed Rates
And Balloon Mortgages
Review Answers
When in History was Supply Side Economics used, and when was Demand Economics used.
(Demand) Keynesian-After Great Depression to jump start the economy
Supply Side-Reagan
Explain the 4 types of Unemployment
Frictional
Seasonal
Structural
Cyclical
When your laid off and searching you are in frictional unemployment
Structural- When your skills don’t match the available jobs or lose your job due to not having the correct skills
Seasonal-When companies or industries shut down for a season
Cyclical-When Unemployment goes up during tough times and down during good times
In order to spread out your wealth and reduce risk you must _____________ your portfolio.
Diversify