(10 points) Online Quiz for Unit Four Vocabulary (Quizlet): http://quizlet.com/76224067/unit-4-econ-vocabulary-flash-cards/
(10 points) Unit Four Vocabulary Definitions & Original Examples:
Money: Assets that people are generally willing to accept in exchange for goods and services or for payment of debts.
Example: 20 dollar bills, pennies, nickels, and dimes
Median of Exchange: Anything that is used to determine value during the exchange of goods and services
Example: Cigarettes and Cigars
Barter: Exchange goods without involving money.
Example: Swapping a bag of beans for a bag of fruit
Unit of Account: A means for comparing the values of goods and services
Example: Prices in U.S. are expressed in dollars; For bread it’s $2/loaf and price of wine is $6/bottle, without a common unit of account we would say that a loaf of bread costs 1/3 bottle of wine and a bottle of wine costs 3 loaves of bread
Store of Value: An item that people can use to transfer purchasing power from the present to the future
Example: A commodity like gold
Currency: Coins and paper bills used as money
Example: Nickels, Dimes, and Pennies
Commodity Money: Objects that have value in themselves and that are also used as money
Example: Precious metals; silver, gold, platinum
Representative Money: Objects that have value because the holder can exchange them for something else of value
Example: Precious Metals; Silver, Gold, Platinum
Flat Money: Money that has value because the government has ordered that it is an acceptable means to pay debts
Example: Gold
Gold Standard: A monetary standard under which the basic unit of currency is defined by a stated quantity of gold
Example: Trading $20.67 at the counter for an ounce of gold
6 Characteristics of Money: organization, metabolism, responsiveness, growth, development, reproduction
Example: Banks
Banks: Financial institutions that accept deposits and make loans
Example: US Bank
National Bank: Hamilton's big idea; fiercely opposed by Jefferson and Democratic-Rep. The bank would regulate money and draw investors; showed that the constitution could be construed in many a way.
Example: National Bank of Omaha
Bank Run: A situation in which many depositors simultaneously decide to withdraw money from a bank
Example: Typically what happens as result of panic
Greenbacks: Name for Union paper money not backed by gold or silver. Value would fluctuate depending on status of the war (plural)
Example: Greenback Party
Federal Reserve System: 1913 - central banking system of the US - created by the Federal Reserve Act - quasi public system
Example: When you cash check or have money electronically transmitted
Central Bank: An institution designed to oversee the banking system and regulate the quantity of money in the economy
Example: TCF Bank
Member Bank: Bank that belongs to the Federal Reserve System
Example: Wells Fargo
Federal Reserve Note: The national currency we use today in the United States
Example: Dollar bills
Great Depression: A hard time in American when there was no money
Example: Dust Bowl
Federal Deposit Insurance Corporation: A federal government guarantee of certain types of bank deposits for account balances of up to $100,000.
Example: The type of account a depositor holds affects the amount of FDIC coverage he/she may have
Ears in American Banking: The banks overdraft rate
Example: Bank offers periodic rates
Crisis: A sudden, unpredictable, and potentially dangerous event requiring the president to play the role of crisis manager.
Example: Getting an F on a paper
Money Supply: All the money available in the United States economy
Example: Banks
Liquidity: Availability of resources to meet short-term cash requirements.
Example: You take an old painting from an attic to the local filming of Antiques Roadshow, the expert says your painting is worth
$50,002
Demand Deposit: A bank deposit from which withdrawals can be made without notice
Example: Checking accounts
Money Market Mutual Fund: A fund that pools money from small savers to purchase short-term government and corporate securities
Example: Banking and investing money into fluids
Fractional Reserve Banking: A banking system that keeps only a fraction of funds on hand and lends out the remainder
Example: US Bank only lends out little money
Default: Failure to act
Example: Sally not acting quickly to catch the baseball
Mortgage: A lien on real property as security for a debt. A special contract by which the borrower conveys to the lender a security interest in the mortgaged property.
Example: House mortgage
Credit Card: A card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered
Example: Target credit card
Simple Interest: The amount of interest based on a principal amount and not on earned interest.
Example: US Bank taking a percentage of your money
Compound Interest: Interest calculated on both the principal and the accrued interest
Example: Lending money to a friend and having them pay 10% more each month they go over when they finally return the money
Principal: The amount of money borrowed
Example: A $22,000 loan used to start a business
Debit Card: A card (usually plastic) that enables the holder to withdraw money or to have the cost of purchases charged directly to the holder's bank account
Example: Visa debit card
Creditor: A person to whom money is owed
Example: Sharon B. Johnson is a creditor at TCF Bank
Types of Financial Institutions: Banks: banks, credit unions savings and loans, internet banks & Non-Banks: mutual fund companies and brokerages
Example: Wells Fargo, American Express, Morningstar
Should the Government increase regulation of Financial Markets: Yes, but there interference should be limited
Example: No example available
Investment: Expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories.
Example: Giving George $12,000 to start his baking business
Financial System: The group of institutions in the economy that help to match one person's saving with another person's investment
Example: In a business, system that enables lenders and borrowers to exchange funds
Financial Asset: Claim on the property or income of a borrower
Example: Someone has partial ownership of a business
Financial Intermediary: Financial institutions through which savers can indirectly provide funds to borrowers
Example: Insurance companies, broke-dealers
Mutual Fund: A regulated investment company with a pool of assets that regularly sells and redeems its shares
Example: Sticks, bonds, money market instruments
Diversification: A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets
Example: No available example
Portfolio: A collection of financial assets
Example: A business proposal
Prospectus: Formal proposal
Example: Business Plan
Return: Income earned on an investment
Example: Income you gain from working at a job
Risks: Chances of loss or harm
Example: · You take an old painting from an attic to the local filming of Antiques Roadshow, the expert says your painting is worth
$50,002
Bonds: A certificate issued by a government or private company which promises to pay back with interest the money borrowed from the buyer of the certificate: The city issued bonds to raise money for putting in new sewers.
Example: Money most people get when they’re younger to help pay for college
Coupon Rate: The annual coupon divided by the face value of a bond.
Example: Daily coupons
Maturity: During the maturity stage of a products life cycle, sales revenues continue to rise but at a much slower rate. Economics of scale will give the firm a competitive advantage. Promotional activities tend to focus on remaining customers.
Example: No available example
Per Value: The amount that investor pays to purchase a bond and that will be repaid to the investor at maturity
Example: A bond with a par value of $1,000 and a coupon rate of 4% will have annual coupon payments of $40
Yield: For a savings account, the percentage of interest earned annually. For a stock, the annual dividend divided by the share price.
Example: It’s hoped that parallel anti-dumping investigation will yield similar results
Savings Bond: Low-denomination bond issued by the United States government
Example: Money most kids get for college when they’re older
Municipal Bond: A bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks and schools
Example: Local government of Chanhassen issuing a bond to help local outdoor public playgrounds and sports fields
Corporate Bond: A bond that a corporation issues to raise money to expand its business
Example: Fundraising for companies
Securities and Exchange Commission: Monitors the stock market and enforces laws regulating the sale of stocks and bonds
Example: Joe monitors the stock market to make sure everything is following the regulations and rules making it fair
Junk Bond: A lower-rated, potentially higher-paying bond
Example: A bond that is worth more
Capital Market: Market in which money is lent for periods longer than a year
Example: New York stock exchange
Money Market: A mutual fund or account that invest in short-term, liquid investments. These funds generally pay better that a savings account with a bank, but less than a typical stock mutual fund. These funds are considered very low risk.
Example: Commercial paper
Primary Market: Market for selling financial assets that can only be redeemed by the original holder
Example: When the original holder re-purchases their assets
Secondary Market: Market for reselling financial assets
Example: The fruit stand re-sells their financial assets
Buying Bonds at a Discount: T-bills: government asks investors this question: how much will you loan us today if we promise to repay you 10,000 in one year from now
Example: When bonds go on sale
Bond Ratings: Aid in determining interest rates and reserves; may assist in issuance of bonds.
Example: A grade assigned to a specific bond
Treasury Bonds: US government obligations with original maturities of more than 10 years. They are issued in $1000 denominations and pay interest semiannually
Example: Default-free securities
Treasury Bills: U.S. government obligations generally issued with 4, 13, and 26 week maturities.
Example: Default-free securities
Treasury Notes: Certificates issued by the US Treasury in exchange for minimum amounts of $1,000 and maturing in 1 to 10 years
Example: Default-free securities
Share: A system used on southern farms after the Civil War in which farmers worked land owned by someone else in return for a small portion of the crops.
Example: Nike share
Equities: Financial rights to the assets of a business
Example: Ownership
Capital Gain: The amount by which the selling price of an asset exceeds the purchase price
Example: Sale price + Purchase Price
Capital Loss: The difference between a lower selling price and a higher purchase price resulting in a financial loss for the seller
Example: Purchase Price – Sale Price
Stock Split: The division of a single share of stock into more than one share
Example: Nike share being split into half
Stockbroker: A person who links buyers and sellers of stock
Example: Chris Gardner
Stock Exchange: A market for buying and selling stock
Example: Buying the Nike and Apple stock
Nasdaq: American market for OTC securities
Example: Index bonds
OTC market: An electronic marketplace for stocks and bonds
Example: Marketplaces on the internet
Futures: Contracts to buy or sell at a specific date in the future at a price specified today
Example: The New York Mercantile
Options: Contracts that give investors the choice to buy or sell stock and other financial assets
Example: Personal things you think
Call Option: The option to buy shares of stock at a specified time in the future
Example: Buying a stock now or waiting to make the purchase in the future
Put Option: The option to sell shares of stock at a specified time in the future
Example: Selling stocks now or waiting to sell them in the future
Bull vs. Bear Market: Bull: is the market looks or is going BAD & Bear: is the market looking or is going GOOD
Example: Bull Market of 1901
Dow Jones Industrial Average: The average cost of 30 selected stocks, used to give an indication of the direction (up or down) of the stock market over time.
Example: Logic used to decide the DJIA companies
S&P 500: Index that shows the price changes of 500 different stocks
Example: Pricing of stocks increasing
Great Crash: The collapse of the stock market in 1929
Example: When the stock market crashed in 1929
Speculation: An involvement in risky business transactions in an effort to make a quick or large profit.
Example: Pork bellies
Day Trading: Trying to predict a minute by minute prince change based on computer programs that tell traders when to buy and sell.
Example: Gambling on predicting the price
Fate of The Dot-Coms: Company doing business mainly on the internet
Example: Amazon
Money: Assets that people are generally willing to accept in exchange for goods and services or for payment of debts.
Example: 20 dollar bills, pennies, nickels, and dimes
Median of Exchange: Anything that is used to determine value during the exchange of goods and services
Example: Cigarettes and Cigars
Barter: Exchange goods without involving money.
Example: Swapping a bag of beans for a bag of fruit
Unit of Account: A means for comparing the values of goods and services
Example: Prices in U.S. are expressed in dollars; For bread it’s $2/loaf and price of wine is $6/bottle, without a common unit of account we would say that a loaf of bread costs 1/3 bottle of wine and a bottle of wine costs 3 loaves of bread
Store of Value: An item that people can use to transfer purchasing power from the present to the future
Example: A commodity like gold
Currency: Coins and paper bills used as money
Example: Nickels, Dimes, and Pennies
Commodity Money: Objects that have value in themselves and that are also used as money
Example: Precious metals; silver, gold, platinum
Representative Money: Objects that have value because the holder can exchange them for something else of value
Example: Precious Metals; Silver, Gold, Platinum
Flat Money: Money that has value because the government has ordered that it is an acceptable means to pay debts
Example: Gold
Gold Standard: A monetary standard under which the basic unit of currency is defined by a stated quantity of gold
Example: Trading $20.67 at the counter for an ounce of gold
6 Characteristics of Money: organization, metabolism, responsiveness, growth, development, reproduction
Example: Banks
Banks: Financial institutions that accept deposits and make loans
Example: US Bank
National Bank: Hamilton's big idea; fiercely opposed by Jefferson and Democratic-Rep. The bank would regulate money and draw investors; showed that the constitution could be construed in many a way.
Example: National Bank of Omaha
Bank Run: A situation in which many depositors simultaneously decide to withdraw money from a bank
Example: Typically what happens as result of panic
Greenbacks: Name for Union paper money not backed by gold or silver. Value would fluctuate depending on status of the war (plural)
Example: Greenback Party
Federal Reserve System: 1913 - central banking system of the US - created by the Federal Reserve Act - quasi public system
Example: When you cash check or have money electronically transmitted
Central Bank: An institution designed to oversee the banking system and regulate the quantity of money in the economy
Example: TCF Bank
Member Bank: Bank that belongs to the Federal Reserve System
Example: Wells Fargo
Federal Reserve Note: The national currency we use today in the United States
Example: Dollar bills
Great Depression: A hard time in American when there was no money
Example: Dust Bowl
Federal Deposit Insurance Corporation: A federal government guarantee of certain types of bank deposits for account balances of up to $100,000.
Example: The type of account a depositor holds affects the amount of FDIC coverage he/she may have
Ears in American Banking: The banks overdraft rate
Example: Bank offers periodic rates
Crisis: A sudden, unpredictable, and potentially dangerous event requiring the president to play the role of crisis manager.
Example: Getting an F on a paper
Money Supply: All the money available in the United States economy
Example: Banks
Liquidity: Availability of resources to meet short-term cash requirements.
Example: You take an old painting from an attic to the local filming of Antiques Roadshow, the expert says your painting is worth
$50,002
Demand Deposit: A bank deposit from which withdrawals can be made without notice
Example: Checking accounts
Money Market Mutual Fund: A fund that pools money from small savers to purchase short-term government and corporate securities
Example: Banking and investing money into fluids
Fractional Reserve Banking: A banking system that keeps only a fraction of funds on hand and lends out the remainder
Example: US Bank only lends out little money
Default: Failure to act
Example: Sally not acting quickly to catch the baseball
Mortgage: A lien on real property as security for a debt. A special contract by which the borrower conveys to the lender a security interest in the mortgaged property.
Example: House mortgage
Credit Card: A card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered
Example: Target credit card
Simple Interest: The amount of interest based on a principal amount and not on earned interest.
Example: US Bank taking a percentage of your money
Compound Interest: Interest calculated on both the principal and the accrued interest
Example: Lending money to a friend and having them pay 10% more each month they go over when they finally return the money
Principal: The amount of money borrowed
Example: A $22,000 loan used to start a business
Debit Card: A card (usually plastic) that enables the holder to withdraw money or to have the cost of purchases charged directly to the holder's bank account
Example: Visa debit card
Creditor: A person to whom money is owed
Example: Sharon B. Johnson is a creditor at TCF Bank
Types of Financial Institutions: Banks: banks, credit unions savings and loans, internet banks & Non-Banks: mutual fund companies and brokerages
Example: Wells Fargo, American Express, Morningstar
Should the Government increase regulation of Financial Markets: Yes, but there interference should be limited
Example: No example available
Investment: Expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories.
Example: Giving George $12,000 to start his baking business
Financial System: The group of institutions in the economy that help to match one person's saving with another person's investment
Example: In a business, system that enables lenders and borrowers to exchange funds
Financial Asset: Claim on the property or income of a borrower
Example: Someone has partial ownership of a business
Financial Intermediary: Financial institutions through which savers can indirectly provide funds to borrowers
Example: Insurance companies, broke-dealers
Mutual Fund: A regulated investment company with a pool of assets that regularly sells and redeems its shares
Example: Sticks, bonds, money market instruments
Diversification: A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets
Example: No available example
Portfolio: A collection of financial assets
Example: A business proposal
Prospectus: Formal proposal
Example: Business Plan
Return: Income earned on an investment
Example: Income you gain from working at a job
Risks: Chances of loss or harm
Example: · You take an old painting from an attic to the local filming of Antiques Roadshow, the expert says your painting is worth
$50,002
Bonds: A certificate issued by a government or private company which promises to pay back with interest the money borrowed from the buyer of the certificate: The city issued bonds to raise money for putting in new sewers.
Example: Money most people get when they’re younger to help pay for college
Coupon Rate: The annual coupon divided by the face value of a bond.
Example: Daily coupons
Maturity: During the maturity stage of a products life cycle, sales revenues continue to rise but at a much slower rate. Economics of scale will give the firm a competitive advantage. Promotional activities tend to focus on remaining customers.
Example: No available example
Per Value: The amount that investor pays to purchase a bond and that will be repaid to the investor at maturity
Example: A bond with a par value of $1,000 and a coupon rate of 4% will have annual coupon payments of $40
Yield: For a savings account, the percentage of interest earned annually. For a stock, the annual dividend divided by the share price.
Example: It’s hoped that parallel anti-dumping investigation will yield similar results
Savings Bond: Low-denomination bond issued by the United States government
Example: Money most kids get for college when they’re older
Municipal Bond: A bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks and schools
Example: Local government of Chanhassen issuing a bond to help local outdoor public playgrounds and sports fields
Corporate Bond: A bond that a corporation issues to raise money to expand its business
Example: Fundraising for companies
Securities and Exchange Commission: Monitors the stock market and enforces laws regulating the sale of stocks and bonds
Example: Joe monitors the stock market to make sure everything is following the regulations and rules making it fair
Junk Bond: A lower-rated, potentially higher-paying bond
Example: A bond that is worth more
Capital Market: Market in which money is lent for periods longer than a year
Example: New York stock exchange
Money Market: A mutual fund or account that invest in short-term, liquid investments. These funds generally pay better that a savings account with a bank, but less than a typical stock mutual fund. These funds are considered very low risk.
Example: Commercial paper
Primary Market: Market for selling financial assets that can only be redeemed by the original holder
Example: When the original holder re-purchases their assets
Secondary Market: Market for reselling financial assets
Example: The fruit stand re-sells their financial assets
Buying Bonds at a Discount: T-bills: government asks investors this question: how much will you loan us today if we promise to repay you 10,000 in one year from now
Example: When bonds go on sale
Bond Ratings: Aid in determining interest rates and reserves; may assist in issuance of bonds.
Example: A grade assigned to a specific bond
Treasury Bonds: US government obligations with original maturities of more than 10 years. They are issued in $1000 denominations and pay interest semiannually
Example: Default-free securities
Treasury Bills: U.S. government obligations generally issued with 4, 13, and 26 week maturities.
Example: Default-free securities
Treasury Notes: Certificates issued by the US Treasury in exchange for minimum amounts of $1,000 and maturing in 1 to 10 years
Example: Default-free securities
Share: A system used on southern farms after the Civil War in which farmers worked land owned by someone else in return for a small portion of the crops.
Example: Nike share
Equities: Financial rights to the assets of a business
Example: Ownership
Capital Gain: The amount by which the selling price of an asset exceeds the purchase price
Example: Sale price + Purchase Price
Capital Loss: The difference between a lower selling price and a higher purchase price resulting in a financial loss for the seller
Example: Purchase Price – Sale Price
Stock Split: The division of a single share of stock into more than one share
Example: Nike share being split into half
Stockbroker: A person who links buyers and sellers of stock
Example: Chris Gardner
Stock Exchange: A market for buying and selling stock
Example: Buying the Nike and Apple stock
Nasdaq: American market for OTC securities
Example: Index bonds
OTC market: An electronic marketplace for stocks and bonds
Example: Marketplaces on the internet
Futures: Contracts to buy or sell at a specific date in the future at a price specified today
Example: The New York Mercantile
Options: Contracts that give investors the choice to buy or sell stock and other financial assets
Example: Personal things you think
Call Option: The option to buy shares of stock at a specified time in the future
Example: Buying a stock now or waiting to make the purchase in the future
Put Option: The option to sell shares of stock at a specified time in the future
Example: Selling stocks now or waiting to sell them in the future
Bull vs. Bear Market: Bull: is the market looks or is going BAD & Bear: is the market looking or is going GOOD
Example: Bull Market of 1901
Dow Jones Industrial Average: The average cost of 30 selected stocks, used to give an indication of the direction (up or down) of the stock market over time.
Example: Logic used to decide the DJIA companies
S&P 500: Index that shows the price changes of 500 different stocks
Example: Pricing of stocks increasing
Great Crash: The collapse of the stock market in 1929
Example: When the stock market crashed in 1929
Speculation: An involvement in risky business transactions in an effort to make a quick or large profit.
Example: Pork bellies
Day Trading: Trying to predict a minute by minute prince change based on computer programs that tell traders when to buy and sell.
Example: Gambling on predicting the price
Fate of The Dot-Coms: Company doing business mainly on the internet
Example: Amazon
(1 Point Each) Example of Current Economic Topic From Unit Four:
1.) An example of a credit card is that both my parents have VISA credit cards that they can use to purchase desired items and goods
2.) An example of currency could be the current currencies of America being the United States Dollar or Finland having their current currency of the Euro
3.) An example of a municipal bond could be the city government of Chaska issuing a bond to build a new public curling facility with an attached restaurant as part of the structure as well
4.) An example of a stock broker in Chaska, Minnesota could be Edward Jones-Financial Adviser: Kelly R. Schrempp
5.) An example of a brokerage could be Sunbelt Business Brokers and M&A Advisors located in St.Paul, Minnesota
1.) An example of a credit card is that both my parents have VISA credit cards that they can use to purchase desired items and goods
2.) An example of currency could be the current currencies of America being the United States Dollar or Finland having their current currency of the Euro
3.) An example of a municipal bond could be the city government of Chaska issuing a bond to build a new public curling facility with an attached restaurant as part of the structure as well
4.) An example of a stock broker in Chaska, Minnesota could be Edward Jones-Financial Adviser: Kelly R. Schrempp
5.) An example of a brokerage could be Sunbelt Business Brokers and M&A Advisors located in St.Paul, Minnesota