Intro to econ quiz

CNBC

TV network on 24/7 in financial world

Notable Econ Media

CNBC, WSJ, The Economist, Marketplace (NPR)

The WSJ

Newspaper ‘of record in financial world

The Economist

Weekly magazine

Great Britain

Marketplace (NPR)

Daily radio show

Economics

Production, distribution, and consumption of goods and services

Study of how society manages scarcity

Who gets what for how much and how these decisions are made

What are the 3 big economic terms

Scarcity, Tradeoff, Opportunity cost

Scarcity

There’s not enough of everything for everyone all the time

Tradeoff

When we sacrifice one thing to obtain the other

Opportunity cost

The thing you did not choose when you make a trade-off

Loser of the tradeoff

What are the two streams of economics

Microeconomics and Macroeconomics

Micro

deals with individuals, households, and firms

Macro

Deals with entire national and global economic issues

Micro examples

New coffee shop in town

Vic Bailey Ford sells most vehicles ever in a year

You get a raise at work

Macro examples

Coffee bean prices increase on world market

Toyota Carolla becomes the best selling car in the world

USA federal minimum wage unchanged since 2009

What are the 3 types of economics

Market (capitalist) economy

Command (communist) economy

Mixed (socialist economy)

Market (capitalist) economy

Economic matters decided by the free market

Command (communist) economy

economic matters decided by the state

Mixed (socialist) economy

blends elements of a market economy with elements of a planned economy

Norway, Sweden, Denmark, Finland

Essential Econ Metrics

Economic Growth

Unemployment

Inflation

Economic Growth

All goods and services that happen in a year

GDP

Gross Domestic Product

Current GDP growth

2.8%

Ideal GDP growth for US economy?

About 3%

Unemployment

Percentage of ‘eligible’ loabor force out of work

Ideal unemployment rate for US economy

About 3%

Current rate of unemployment

4.1%

Inflation

General increase in prices

Current inflation rate

2.9%

Ideal inflation rate

about 2%

Adam Smith

The Godfather of modern economics

Book: Wealth of Nations (1776)

-1st great work of modern econ

Invisible hand theory-super famous thing in the econ world

Antitrust

Laws intended to stop large/domiant firms from abusing market power

Budget

Balanced

Deficit

Surplus

Bankruptcy

When a federal court decides a debtor cannot repay creditors

Firms and individuals can declare bankruptcy

Outcomes of bankruptcy

dismissal

complete liquidation

reorganization of debt

Notable Bankruptcies

Lehman Bros (the biggest ever), GM and Chrysler, American and Delta, Several Trump companies, Abe Lincoln, Walt Disney, Mr Heinz, Mike Tyson, and Sam Walton

Bear

pessimistic

Bubble

When a market’s value get ridiculously high

Bull

optimistic

The Business Cycle

a free market/ capitalist economy is a roller coaster of ups/downs

Capital

money/resources put to economic use… the lifeblood of capitalism

Central bank

a gov-controlled bank that regulates and manages the monetary system

-the rich world → top 50 economies in the world

Capitalism

dominant economic ‘religion’ of modern times; most things owned by individuals and firms; its essential drivers are competition, profit, and market forces of supply and demand

communism

economic ‘religion’ that called for the end of capitalism; public ownership and communal control of most things; redistribution of wealth to ‘level’ society

CEO

Chief Executive Officer

CFO

Chief Financial officer

COO

Chief operations officer

CIO

Chief Information officer

CCO

Chief compliance officer

Collateral

a thing to guarantee back a loan that can be seized by lender if borrower defaults

Commodity

raw material or agricultural product; a useful or valuable thing

liquid asset

cash; or an asset quickly convertible to cash