ECONOMICS - UNIT #3

savings account

give the bank your money, in return bank gives you interest to use your money, liquid

certificate of deposit (CD)

give the bank your money, in return the bank gives you interst to use your money, not liquid

bond maturity

when you get the principle back (bond expires/time is up)

bond yield

the interest/ percentage of how much the holder gets back

saving bond

from federal government

municipal bond

from state/local government

treasury bond

from federal treasury department (safest)

junk bond

poopy investment, highest risk of bankruptcy

dividend

part of profit corporations give to stockholders

capital gains

profit on an investment

common stock

more decision making power, less money

preferred stock

more money, less decision making power

stock split

when corporations split shares of stock into more than one share, usually done if the shares are popular and if they think the share price is too high

stock exchange

where stocks are sold and bought

stock index

where you check the status of stocks

Dow Jones

top 40 company’s stock value

NASDAQ

stock market (mainly tech and electronics)

progressive tax

more tax on the wealthy than the poor

regressive tax

more tax on the poor rather than the rich f

flat tax

everyone is taxed the same amount

classical economic policy

the government should stay OUT of economics and allow people to make their own decisions about resources k

keynesian economic policy

the government should be INVOLVED on consumer demand when problems arise to encourage people to continue to buy goods/services

supply side economic policy

the government should focus on cutting company taxes supply side when crisis occurs to create jobs