Economics - First Vocab Test

Economics

the study of choices with limited resources

Bear Market

people pull money out of stock market...stocks go down

Bull Market

people put money into market...stocks surge

Diversification

spreading out rick by investing in different industries

ROI

return on investment

IPO

initial public offering

Stock

a share in a company

Mutual Fund

collection of many stocks that protects from risk

Bonds

an "I-owe-you"

Appreciation (in economics)

the value goes up

Depreciation

the value goes down

Interest (on a loan)

money the bank charges you for borrowing their money

Interest (on an investment, like a stock or mutual fund)

gains you make on an investment

Inflation

value of money goes down/prices go up

Entrepreneur

risk-taker

Profits

income - costs

Blue Chip stocks

high performance stock

Microeconomics

individual behavior

Macroeconomics

nation behavior

IRA

Individual Retirement Account

Roth IRA

taxed on front end

401K

taxed on back end

Capital Gains Tax

tax on profits

Capital (to start or expand a business)

fancy way of saying "money"

Recession

two consecutive quarters of negative economic growth

Federal Reserve

regulates interest rates

Mortgage

home loan

Compound Interest

time = money