Bond: A loan to a company or government. U.S Bonds are typically $10k at fixed interest rate.
Bond market is
Mutual Funds: A group of stocks managed by a company of which individuals can buy shares.
(represents ownership of the stock)
Allow you to satisfy the most important rule of investing: Diversify.
ETF: Relatively safe investment,
Government Transfers: Payments to individuals or companies with no repayment. Examples are
welfare, social security and subsidies. It is not spending money for the government, it is not
money spent when building a highway
Wealthy people save on average 20 to 30% of their income before taxes.
Disposable income: Household income and transfers after taxes. Total amount of HH income
available to spend in goods and services. (How much money you can spend)
Private savings: Disposable Income – Consumer Spending.
Government borrowing: Amount of funds borrowed by government in financial markets.
Inventories: Goods and raw materials held to facilitate business operations.
Consumer Spending: Household spending on goods and services. (How much money you
actually spend)
Investment Spending: Spending on new physical capital such as machinery and structures and
changes in inventories.
Unit 2 extra content :
Topic: Business cycles.
Cyclical unemployment would be anywhere below the natural employment line
Actual GDP
Inflationary gap
Lowest
Unemployment
Peak
GDP at Natural
Unemployment
(Full employment)
Potential GDP
Recessionary gap
Expansionary
Time