ap gov final pt. 2

financial literacy

savings account

yes interest, no checks, no risk

checking account

no interest, yes checks, no risk

money market account

yes interest, no checks, yes risk

liability auto

pays for the OTHER persons injury or vehicle

comprehensive auto

compensates YOU from NON-COLLISION damages

collision auto

covers YOU from COLLISION damages

Property Insurance

Fire, Flood, Earthquake, or Home damages covered

Life Insurance

if death, $$$ to designated people

Term Life Insurance

if death, $$$ to designated people, shorter term

Disability Insurance

if disabled physically or mentally, $$$ if cant work

Health Insurance

$$$ for your medical treatment

factors of high risk

age, race, location, sex, personal history, family history, make and model of vehicle

deductible

the $$$ you pay that is not covered by insurance

policyholder

person who pays and receives benefit

insurance

forms of risk management

Factors of Production

Land, Labor, Capital, Entrepreneurialism

Land Prod Factors

trees, sand, water

Labor Prod Factors

physical input or mental thoughts

Capital Prod Factors

stuff used to make other stuff (ex. factory, hammer, money)

Entrepreneurialism Prod Factors

risk-takers who have a profit incentive

Pay Yourself First

make your money work for you

buy, hold, diversify

don't put all your eggs in one basket!!!

Utility Factors

decreases with repetition, rich struggle to achieve it

long term loans

lower interest rates, longer time to pay it back

credit loans are…

designed to fit your individualized needs

credit bureaus

decide your credit rating thru 3 C's: character, collateral, & capacity (Experian/Equifax)

APR

Loan cost (Annual Percentage Rate)

Universal Default (illegal since 2011)

when card issuers increase cardholders interest rates when they are already failing to pay

credit non-physicality

intangible; easier to spend more without thinking

credit rates can change…

with only 45 day notice

with credit, you're technically paying…

paying more than something costs

you dont pay insurance if…

you already paid by the end of month

stocks

highest risk, highest rewards, invest in private companies

bonds

high risk, high rewards, invest in gov

certificate of deposit

zero risk, low reward, invest in gov

what account is used for everyday purchases?

checking account for everyday purchases

what controls a free market economy?

interactions between consumers and marketers

what happens when utility increases?

price increases