economics

define wages

money earned from your job

define savings

money set aside for later spending

define credits

money borrowed from a bank

define interests

money thats paid to me for holding a sum of money in a bank account

define compound interest

interest that increases in value overtime because the interest is calculated based on an increasing amount of money

define superannuation

long term savings that are required by law to ensure a person has retirement funds

define savings account

an account held in a bank where you can deposit money and earn income

define term deposit

an account that you deposit money into a fixed period of time in exchange for a better rate of interest

define shares

purchasing a small percentage of ownership of a business in exchange of dividends

define credit contrast

a legal contrast that sets out the terms of the loan, the repayments and the interest

what is good and bad debt

good- money borrowed for a item that appreciates in value

e.g. house, education

bad- money borrowed for a item that deppreciates in value

e.g. holiday, motorbike

what are 8 types of credit

-credit card

-personal loan

-buy now, pay later

-in-store credit

-payday loan

-car loan

-home loan

-bank overdraft

define competitive advantage

a unique edge that businesses use to outperform their rivals

define competition

competing against other brands for consumers attention and disposible income

why do businesses invest in creating a competitive advantage

they sell more products, earn more profit and gain a larger share of the market

how to create a competitive advantage

make a unique product

sell at the lowest price

make a higher quality product

have a strong branding and make it convenient to purchase

define market share

the percentage of sales that belong to a single brand

define brand loyalty

comsumers who repeatly purchased from one brand

define unique selling proposition USP

a unique feature or belief of a product, service or business that makes it different from other competitors

define innovation

creating a new product or improving an existing product to meet customers needs

why do businesses innovate

-gain competitive advantages over other brands

-increase sales and market share

-charges a premium price

define economies of scale

businesses can produce products more cheaper if they produce in bulk

multi-national corporations(MNCs) are successful because of

-economic of scale

-large pool of customers

-access to cheaper labour and resources

why do companies specialise

-more revenue

-better quality products

-lower costs

-loyal customers

define investment

an asset purchased with expectation that it will generate income or the asset will appreciate in value

what are 4 types of risks

liquidity risks- need to trade quickly to take advantages of savings

market risks- the chance that external factors will negatively affect businesses

operational risks- the chance that people, processes or machines will the business to make a loss

credit risks- the chance that the company wont be able to pay its loan and go bankrupt

what does smart in economics

S pecific

M easurable

A ttainable

R elevant

T ime-bound

how do scammers work

by using psychological manipulation, deceptive technology, and organised criminal networks to trick you into giving away money or personal information.

define phishing scams

fraudulent emails, links and messages that appear to come from a trusted source but are a scammer attempting to get your information, identity theft and money

define identity theft

when a scammer steals your personal identity documents to pretend to be you

define romance scam

when scammers build a relationship with a victim for the purpose of persuading them to send money

what do people do with fake crypto currency scams

-make fake currency to victims

-convince investors of high returns

-launder stolen funds

why do scammers use AI

to create fake websites, brandings, audios/video clips, and documents/reports

how do businesses innovate

due to a method called the process innovation, businesses can redesign workflow automation and adopting advanced software to manufacture goods

why is competitive advantage vital for long business success

when a business establish a competitive advantage through cost leadership

it lowers production expenses and would lead to increased customer loyalty and higher market share because the company passes savings to consumers for lower prices

as a result, the business secures long-term profitability and avoids being pushed out of rivals