Supply is seen in the eyes of the producers and is the incentive that as price increases so does supply
Total amount of good/ service at each price point

Law of Supply - Producers supply more of a good as its price rises and less as its price falls.

As prices increase, so does the supply
Decreases so does supply

Causes of the Supply Curve to shift prices can cause the supply curve to shift

Left shift-increase
Right shift-decrease
As input price increases supply decreases
Causes for supply to shift(determinants)
- Price of the good or service (law of supply)
- Technology can reduce input cost increasing supply
- The global economy sets the relative price
- Natural conditions such as weather or natural disasters can slow production

Prices -

prices fluctuate depending on the movement of buyers and sellers
Price correlates with quantity when there is equilibrium

Shortage - when there is less of a good than there is the demand for it

If the price is lower than the equilibrium it is a shortage

Surplus - when there is more of a good than there is the demand for it

there is a surplus of a good if it is one cent above the equilibrium

Money - Anything that a person can use to purchase goods or services. Replaces the need for bartering.

Medium of exchange - give the store medium and store gives good or service

Barter - exchange (goods or services) for other goods or services without using money.

Unit of account - a means for comparing values for goods and services

Store of value - money keeps and retains value for future use

6 characteristics of money:

Durability,
- Able to withstand the wear and tear of being used over and over
Limited Supply,
- Money would lose its value if there was an unlimited supply of it so it must be regulated and only have a certain amount
Acceptability,
- Everyone in the economy must be able to accept the objects used as money
Divisibility,
- Can easily be divided into smaller denominations
Portability,
- Easy to carry around with you
Uniformity
- People must be able to count and measure money accurately
- $1=$1 in every marketplace

Commodity money - Any money that his value in of itself

Representative money - exchanged money for something else of value

ex:Personal checks/ debit card (checking account) / gold/ silver / IOU note/gift cards

Fiat money-money that has value since the gov. says it has value

Liquidity-how fast you can turn assets into cash

Banking System- a group or network of institutions that provide financial services for us.

Banks earn profits by lending money at higher interest rates than they pay on deposits/ex. Checking/ saving accounts

How do banks create a profit?-Banks earn profits by lending money at higher interest rates than they pay on deposits/ex. Checking/ saving accounts

Investment - the process of investing your money in an asset with the objective to grow your money in a stipulated time period

Diversification

spreading out of investments to reduce risk

Stock - Stocks consist of all the shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporation in proportion to the total number of shares.

A portion of a stock

Capital gain

a stockholder sells stock for more than he or she paid for i

Capital loss

A stockholder that sells stock at a lower price than the purchase price

Risks involved with investment

Purchasing stock is risky because the firm selling the stock may encounter economic downturns that force dividends down or reduce the stock’s value. It is considered a riskier investment than bonds.

Bear market-When the stock market rises steadily over time

Bull market–when the stock market falls over a period of time

Dow Jones Industrial average-The Dow is an index that shows how stocks of 30 companies in various industries have changed in value.

S & P 500-The S & P 500 is an index that tracks the performance of 500 of the top stocks.

Brokerage account

A brokerage account is a type of investment account opened with a brokerage firm. You can deposit money into a brokerage account and the brokerage firm will execute investment orders at your request. Many investors use brokerage accounts to purchase stocks, bonds, mutual funds or exchange-traded funds online

Retirement account

Price floor-the minimum price set by the government that can be charged for a good or service(minimum wage)

Price ceiling- the max price that can legally be charged for a good or service(rent control)

Bitcoin

Bitcoin is a cryptocurrency created by Satoshi Nakamoto which like other cryptocurrencies is volatile. Allows person-to-person transactions/ decentralized from the gov./ used mainly as investments but can be used for money

Does cryptocurrency satisfy any of these characteristics?