Lconomlcs llnal 8evlew

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M|croeconom|cs lndlvlduals maklng declslons or companles/flrms ex CM
Macroeconom|cs Lhe markeL ex auLomoLlve
Scarc|ty people do noL and cannoL have enough lncome and Llme Lo saLlsfy Lhelr wanL
O JanLs deslre
O -eeds necesslLy
actors of roduct|on
1 and naLural resources
2 abor Lhe work people do
3 CaplLal manufacLured goods LhaL make oLher goods or servlces
4 LnLrepreneurshlp people who Lake rlsks and sLarL new buslness' brlng labor land and caplLal
Lo creaLe producLs
@radeoff exchange of one Lhlng or anoLher
Cpportun|ty cost Lhe nexL besL Lhlng
@ree Lconom|c uest|ons whaL how for whom *[usL know how Lo plck wlLh a quesLlon*
Cap|ta||sm 100 percenL lndlvlduals
O lree enLerprlse Lhe freedom of prlvaLe buslnesses Lo operaLe compeLlLlvely for proflL wlLh
mlnlmal governmenL regulaLlon
O lreedom of cholce freedom Lo plck whaLever you wanL
O 9roflL lncenLlve
O CompeLlLlon 8lvalry beLween Lwo or more buslnesses sLrlvlng for Lhe same cusLomer or markeL
O 9rlvaLe properLy prlvaLe properLy properLy owned by lndlvlduals corporaLlons or
organlzaLlons prlvaLely wlLhouL governmenL lnLervenLlon
Soc|a||sm Z prlvaLe Z publlc

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Market buyers and sellers meeL and make an exchange
O arLer one klnd of merchandlse ls Lraded for anoLher ex food Lraded for weapons or ald of
bulldlng a house ln exchange for clearlng a fleld Lransformlng one good lnLo anoLher by
exchange
O CommodlLy a medlum of exchange ex caLLle Lobacco gold sllver
O 8epresenLaLlve always auLhenLlc always represenLaLlve of lLs value never changes value
O llaL depends on Lhe person who owns lL Lo say LhaL lL has value glve auLhenLlclLy a more
resLrlcLed group of asseLs money whlch ls a commodlLy ls less value Lhen whaL your Lradlng lL
for
CharacLerlsLlcs of Money
urab|e long lasLlng
ortab|e easlly carrled around
|v|s|b|e belng able Lo dlvlde lL up
ung|b|e doesn'L maLLer when lL was made lL always has Lhe same value
Acceptab|e money brlng accepLed anywhere





Servlces of Money
Sav|ngs money you save
Cas$Cange governmenL produced
Loans morLgages and properLy
Cred|t Cards buy now and pay laLer
Invest|ng sLock markeLs
Cecks dlrecLed Lo Lhe bank
3 C's of a oan
1 Caracter clean credlL hlsLory
2 Cond|t|ons economlc facLors LhaL mlghL affecL your buslness
3 Co||atera| don'L pay glve back someLhlng
4 Capac|ty sell enough Lo repay loan
3 Cap|ta| amounLs of money you lnvesLed lnLo your buslness
SLrucLure of lederal 8eserve

luncLlon of lLu
O ank for Lhe uS CovernmenL
O ank servlces for members (oLher banks)
O 8egulaLes bank lndusLry
4 udlLs banks loans
4 9rocesslng checks
4 lLu glves bank a loan lf bank lsn'L dolng well
O Money supply
Money Supply
1) 88 8eserve 8aLlo
4 ank deposlLs
4 88 ls a
4 Money on hand aL a bank
2) ulscounL 8aLe
4 nLeresL charged a bank for a loan
3) Cpen MarkeL
4 onds (1bllls//1 Lreasury)
4 CovernmenL needs moneyLhey sell bonds
9ollcy
Loose Money o||cyLhe demand for credlL ls low relaLlve Lo Lhe supply
@|gt Money o||cydemand for credlL ls hlgh relaLlve Lo Lhe supply

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ross omest|c product () LoLal of all goods and servlces produced ln a monLh (or year) wanL
number Lo grow
Unemp|oyment kate # unemployed / work force
wanL Lhls number Lo go down
overty kate # of clLlzens llvlng ln poverLy / clLlzens
wanL Lls number Lo go down
Inf|at|on kate prlces lncrease
Cld 9rlce -ew 9rlce / Cld 9rlce
wanL Lhls number Lo go up buL only a llLLle blL
9ubllc Coods
1 1ennessee valley uLhorlLy (1v)
ssue floodlng
llx by bulldlng dams
hydropower
2 PealLh Care
Medlcare (reLlred)
Medlcald (poverLy)
Soclal SecurlLy
3 1ax 8evolL
Callfornla
9roposlLlon 13 cuL Laxes
Calendar
Jork ?ear !anuary Llll uecember
ncome Lax uue prll 13
CreaLe udgeL CcLober 1 Llll SepLember 30

1ypes of 1axes
1 ConsumpLlon Sales
do noL Lax
medlclne
food from grocery
2 9roperLy value of land/bulldlng
3 ncome 1ax
earnlngs
buslnesses
lndlvlduals
4 Lxclse 1ax
Lan on manufacLurlng
proLecL naLural resources
3 use 1axes
pay when you use lL
Loll brldge/Loll road/parks
6 uxury 1axes
-onnecesslLles of llfe
hldden ln prlce
alcohol
Lobacco
luxury [ewelry
7 ueaLh 1ax
LsLaLe 1ax pald by person who dles
nherlLance pald by Lhe person who recelves lL
8 LnLerLalnmenL
hldden fee
concerLs
ppllcaLlons for 1axes
1) 9roporLlonal everyone pays same amounL
2) 9rogresslve (graduaLed) as lncome goes up your Lax lncreases
3) 8egresslve as lncome goes up Lax as a goes down

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Low low llvlng sLandard
Subs|stence Lconomy agrlculLure (farm/flsh/hunL) survlval
Infant Morta||ty kate raLe aL whlch lnfanLs dle
Weak roperty kate no personal lnvesLmenL no moLlvaLlon
*******ll characLerlsLlcs of underdeveloped economles low Cu9 Llll properLy raLe
Loca| @rad|t|ons low llLeracy raLereadlng and wrlLlng
8ureaucrac|esarmy navy alr force marlnes coasL guard



copito/ l/iqht
9pu/oti 6rth Loo many people Lo supply [obs for
@rode kestrictis
ttitudes od 8e/iefs
Misuse f kesurces
Abso|ute Advantage lf 2 counLrles have Lhe same resource one can ouL produce Lhe oLher
Comparat|ve Advantage a counLry can ouL produce anoLher aL a cheap cosL
Imports goods comlng lnLo your counLry
Lxports goods golng Lo oLher counLrles
kevenue @ar|ff a way Lo geL money for Lhe governmenL
rotect|ve @ar|ffralse cosL of lmporLed goods so you can compeLe
Import uota resLrlcLs Lhe number of unlLs of a parLlcular good LhaL can be broughL lnLo Lhe counLry
Lmbargo ban on lmporLs
rotect|on|sts argue for Lrade resLrlcLlons
buylng merlcan ls a Murky ManLra

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Comp|ementary oods producLs purchased LogeLher (skls and skl booLs) or a combo meal
Subst|tute oods replace one producL wlLh anoLher producL LhaL ls cheaper
Norma| oodslncome goes up you wlll wanL Lo buy more of Lhe good
Infer|or oods lncome goes up you cannoL buy more of Lhe good (ex Lhe udl)
aw of uemand
emand Lhe wanLs or need Lo have a producL as Lhe prlce lncreases demand goes down
uant|ty emanded change ln prlce
emand Curve change ln prlce of a good or servlce aL each posslble prlce
Ind|v|dua| emand
Market emand add all consumers demand curves LogeLher Lo make a new curve
ueLermlnanL of uemand
opu|at|on people llvlng ln Lhe area
Income money you make
L|ast|c|tyhow a producL or servlce reacL Lo a change ln prlce
aw of Supply
Supp|y as Lhe prlce goes up quanLlLy goes up
uant|ty Supp||ed change ln prlce
ueLermlnanLs of Supply
r|ce Inputs Lhe prlce of one Lhlng relles on Lhe parLs LhaL make lL up
Numbers of Supp||ers lf Lhere are a loL of suppllers Lhere are golng Lo be a loL of goods
@ecno|ogy ls lL ls llmlLed Lhe prlce of Lhe producL goes up
Lnv|ronmenta| Cond|t|ons lf Lhe envlronmenL consLralns you Lhe prlce for Lhe producL goes up
r|ce of oter oods lf Lwo producLs are slmllar and one ls cheaper you wlll buy Lhe cheaper one
Lqulllbrlum 9olnL
Lqu|||br|um uant|ty when Lhe LoLal amounL demanded exacLly meeLs Lhe LoLal supply
Lqu|||br|um r|ce when supply and demand meeL on a charL

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1ypes
ropr|etors|p adv ease of sLarLup few regulaLlons sole proprleLor of proflL easy Lo dlsconLlnue
dlsadv llablllLy llmlLed access Lo resources lack of permanence
artners|padv easy and lnexpenslve Lo seL up responslblllLles are shared larger pool of caplLal Lo
draw from
dlsadv llablllLy (even for parLners mlsLake) poLenLlal for an argumenL
Corporat|on adv llmlLed llablllLy for owners Lransferable ownershlp ablllLy Lo aLLracL caplLal long llfe
ulsadv expenslve double LaxaLlon easy for owners Lo lose conLrol of Lhe company heavlly regulaLed
ranc|se adv sLandardlzed quallLy naLlonal adverLlslng flnanclal asslsLance cenLrallzed buylng
power managemenL Lralnlng and supporL
ulsadv hlgh franchlslng fees and royalLles sLrlcL openlng sLandards and purchaslng sLandards llmlLed
producL llne
Jork lorce
W|te Co||ar desk" [obs admlnlsLraLlve accounLanLs lawyers (skllled professlonal)
8|ue Co||ar more labor [ob assembly [obs manufacLurlng [obs (unskllled seml skllled)
Sklll evel
Unsk|||edmlnlmal educaLlon
Sem|Sk|||ed requlre more educaLlon or cerLlflcaLlons
Sk|||ed deflnlLe educaLlon degrees college dlploma
rofess|ona| advanced educaLlon docLoraLes C9's
unlons
Cpen Sop don'L have Lo belong Lo Lhe unlon Lo work Lhere
C|osed Sopyou have Lo belong Lo Lhe unlon Lo go Lhere
argalnlng
Co||ect|ve dlscusslng beLween boLh unlon reps and Lhe corporaLlon
Arb|trator Lhlrd parLy who bargalns for Lhe lnLeresL of Lhe corporaLlon and unlon workers
Med|ator messenger for Lhe 2 parLles
r|evance a complaln on an lssue flled by a worker


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401(k)
O Company plan
O 9orLlon of Lhe pay wlLhheld and maLched by company
O 1ax deferred on lncome and lnLeresL
O uslness provlded
keogh
O Selfemployed plan
O 13 max of yearly lncome seL aslde
O mounL you conLrlbuLe 13 ls Lax deducLlble
8 and 8oLh 8
O ndlvlduals/marrled couples plan
O ulfference when Laxes are pald
O 8 fuLure 8oLh 8 now
ortfo||omlx of Lhlngs you lnvesL ln
rospectus descrlpLlon of a buyers sLock (lncome sLaLemenL and balance sheeL)
kate of keturn amounL of money you earn on your lnvesLmenL
Cred|t reLurn on lnvesLmenL rlsk on wheLher you'll geL your money back lf you loan lL
L|qu|d|ty Lurnlng Lhe lnvesLmenL lnLo cash
Inf|at|on Lhe rlsk of lnvesLlng your money ln a way LhaL does noL ouLpace lnflaLlon
S|mp|e |nterest bank pays lnLeresL on prlnclpal (deposlL)
Compound |nterest bank pays lnLeresL on prlnclpal and lnLeresL
CC cerLlflcaLe of deposlL
ar va|ue face value of a bond
Coupon rate lnLeresL raLe Lhe borrower ls paylng Lhe saver
Matur|ty (daLe) Llme when Lhe borrower pays Lhe saver
|v|dends porLlon of corporaLlon's proflLs pald Lo lLs sLockholder
Cap|ta| ga|n proflL per galn goes up ln value from Llme bough Llll Llme sold
Stocko|der someone who owns a plece of Lhe company ln Lhe form of a sLock
8rokerage nouse lnvesLmenL banklng company LhaL asslsLs buyers wlLh Lhe purchase of sLocks
Lxchanges
NSL
NASA
C@C
ay trad|ng

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ncome
Wages Lhe amounL of money you work for
ross ay ways you recelve lncome
Net ay lncome Laxes neL pay
|sposab|e |ncome lncome Laxes
|scret|onary |ncome dlsposable lncome necesslLles
Cpportun|ty Cost Lhe besL posslble cholce on a charL
kat|ona| Co|ce
uylng
8rand Name name on cloLhlng
CredlL
Cred|t a clalm Lo recelve a paymenL ln Lhe fuLure
r|nc|p|e base amounL LhaL you loan
Interest more money ln addlLlon Lo Lhe prlnclpal
oans
8anks a place Lhey hold money
Cred|t Un|ons have Lo belong Lhere Lo have lL hold your money
Cred|t Card buy Lhe lLem now buL pay for lL laLer
|nance Carge
Ak Lells you how much lnLeresL you are earnlng on someLhlng