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Economics > Chapter 2 Economics Test > Flashcards

Chapter 2 Economics Test Flashcards

1
Q

Interest equation

A

(Principal)(Rate)(Time)
(P)(R)(T)

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2
Q

What is Principal?

A

Amount of money that still needs to be borrowed

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3
Q

Why do you need credit?

A

-Renting house or apartment
-Buying a house
-Buying, leasing or renting a car
-Cell phone Service
-Buying online
-Getting a job

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4
Q

What does a higher credit score do?

A

Assures chances of getting a good deal

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5
Q

How to establish credit?

A

-A utility account in your name
-Apply for a credit card and use responsibly
-Take a small loan/line of credit
-Cell phone on your name
-Obtain a co-signer for a loan

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6
Q

How to damage your credit?

A

-Bankruptcy
-Missing payments
-Late payments
-Owing lots of money
-Irresponsible credit card use

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7
Q

Why shouldn’t close an Older credit card

A

To have longevity in your credit score

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8
Q

What are things to know before opening a credit card?

A

Annual fees, Interest Rates, are there any perks?

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9
Q

How to improve credit score?

A

Don’t max out, keep them open for longetivity,

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10
Q

Benefit of good credit score

A

Lower interest rates, More options, saves you money

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11
Q

Upward trend in Stock market

A

Bullmarket

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12
Q

Downward trend in stock market

A

Bear market

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13
Q

What is the highest but most riskiest stock?

A

Penny stocks

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14
Q

What are on checks, deposits and balances

A

-Personal info (top left)
-Check number (top right)
-Date (under check #)
-Name of person or -company receiving check
-Amount written in letters
-Amount written in numbers
-Note what the check is for
-Signature

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15
Q

Disadvantages of a Bad credit score

A

Higher interest rates, spend more money than you have, Can be turned away, unable to get a mortgage

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16
Q

What are advantages of credit cards?

A

-Safe alternative to cash
-Bails out of emergencies
-Gives you time to pay
-Build good credit history

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17
Q

Lowest credit score

A

300

18
Q

Highest credit score

A

850

19
Q

Who are the Credit Bureau

A

-Experian
-Equifax
-TransUnion

20
Q

How FICO scores are calculated

A

-35% payment history
-30% what you owe
-15% type of credit
-10% new accounts
-10% length of credit history

21
Q

What is ROI?

A

Return on Investment
Rate of revenues received for every dollar in an invested item

22
Q

What are stocks?

A

Instrument that signifies ownership corporation presents claim on a share of a corporation assets and profits

Long-term investment

23
Q

What are bonds?

A

Bonds are interest-bearing certificates used as a way for governments or businesses to make money
ex. War-bonds WWII

Short-term investment

24
Q

What are mutual funds?

A

open-ended investments that are professionally managed and consists of a variety of investment instruments including stocks, bonds, options, commodities, and money market securities

25
Q

Real-Estate

A

a piece of land with any buildings or structures on it.

Long-term investment

26
Q

Collectibles

A

Items with value due to rarity and desirability

Long-term investment

ex. Coins, cars, art

27
Q

Do all investments have positive Return On Investment?

A

It is more likely; NOT guaranteed

28
Q

Precious Metals

A

Natural metals that have value

Long term investment

Ex. Gold, Palladium

29
Q

Risk and return

A

Greater risk = Greater potential for loss or gain (Volatility)

30
Q

What are the Investor Profiles?

A

Very Conservative, Conservative, Moderate, Aggressive, Very Aggressive

31
Q

What are the 3 basic indicators of stock?

A

-Dow Jones Industrial Average
-Standard and Poor’s Composite Index
-NASDAQ (National Association of Security Dealers Automated Quotations)

32
Q

Broker

A

Person who is licensed to buy and sell stocks as well as provide investment advice and collects commissions, on each purchase or sale

33
Q

First column of stock market

A

Name of corporation

34
Q

Second column of stock market

A

Dividend payment per share the last time dividend payments were paid out

35
Q

Third column of stock market

A

Volume.
Sales of stock sold and bought for the day

36
Q

Fourth column of stock market

A

Price/Earning ratio

37
Q

Fifth column of stock market

A

Last/closing price of stock during the day

38
Q

Sixth column of stock market

A

Change (Chg.) In price of stock from previous day

39
Q

Small market cost

A

<1$ Billion

40
Q

Medium market cost

A

$1 Billion - $5 Billion

41
Q

Large market cost

A

$5 Billion >

42
Q

Volatility

A

risk/reward

Economics (4 decks)

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