Unit 3 Economics Test Review - Stephens

assets-liabilities

anything you own with monetary value

Expenses that do not change in the short term (ex: rent, internet, phone bill)

Expenses that do change (ex: entertainment, groceries, shopping)

newer stocks, higher risk

older stocks, lower risk

Used to estimate the number of years it takes to double the invested money

72/rate of return = time for investment to double

Initial Public Offering, growth stock

Money payed to US government, grows over time

income before taxes are taken out

Income after taxes are taken out

Stock market values are increasing

Stock market values are decreasing

Assets turned into cash

Used to build a retirement fund

Money invested into a corporation

Used as the stock market index, 30 companies

Nickname for value stocks

group of stocks bought together

1 - Capacity

2 - Character

3 - Capital

national credit score

original amount borrowed

Annual Percentage Rates

interest + fees

the person who takes responsibility for the loan if the other faults on the payment

assets attached to a loan (ex: car, home)

the banks legal rights to an asset

beneficiary insured to get money for a certain amount of time after you pass

beneficiary guaranteed to get money after you pass

payments made to insurance companies for their services

Amount paid out of pocket before insurance

full coverage (ex:car damage AND medical)

Personal Liability Property Damage, doesn’t fix vehicle damage, does cover medical

Amount of money paid to investors per share for a secure stock

has collateral attached to it, lower risk (ex cars and homes)

has no collateral, higher risk

1 - Set financial goals

2 - Determine net worth

3 - Evaluate cash flow (net worth)

4 - Balance budget

5 - Follow, record, Adjust

any legal debt you owe

10% of gross income

income > expenses + savings

income < expenses + savings

income - expenses

1 - pay yourself (10% gross)

2 - Diversify savings (security, liquidity, growth)

3 - Emergency Fund

decrease expense

• Building credit history

• Easier to obtain future loans

• Immediate possession

• Flexibility

• Safety (tracking)

• Incentives (hotels, flights)

• Overspending + debt

• Finance chages + fees

• Higher interest rates (credit cards)

• impulse buying

P - principle (original amount borrowed)

R - rate (annual interest rate)

T - time (years of loan)

30 year mortages have a long repayment term, higher total interest rates compared to 15 year

After an accident, each person's insurance fixes the damage, Michigan is a no fault state

After an accident, the person who is to blame insurance fixes the damage

3-6 months (around $1000)