Economics ch 8

the commitment of resources to a project or purpose that is expected to bring future profit to the investor

one who borrows money or capital

one who lends money or capital

what can cause inflation

interest charged

the 2.5% that the person paid on the loan

an account that allows checks to be written up to the dollar amount that the account holder has deposited

an account holder's written order that authorizes his bank to withdraw funds from his account

a bank account that allows the account holder to earn interest on his deposits

an account that guarantees a certain interest rate and has a specified maturity date

an account that allows limited transactions and pays an interest rate that changes with the demand for loans

the money in each type of account is insured

a contract between two parties in which one party protects the other against certain types of loss in exchange for payments called premiums

an arrangement provided by an individual's employer for the intent of providing for the employee's retirement from work

an employer promises to pay an employee a certain amount per month after retirement based upon the employee's salary and length of service

such as a 401(k) plan, an elmployer does not promise an employee any certain amount upon retirement, and the employee, the employer, or both are required to contribute regularly to a special tax-sheltered retirement account set up for the employee

the resources corporations gather by selling ownership in their businesses

a legal entity which is distinct from the people who own

equal portions of a corporation's stock

who owns the whole business

investment companies that combine the resources of all their shareholders and invest the money in a wide variety of areas

assets that flow easily since they can be converted into other investments or cash without much time or difficulty

three key things when investing

in return for making payments to the government, citizens are supposed to be insured to some extent against poverty in old age, the mounting medical expenses of later years, the cost of crippling personal injuries, the loss of parents during childhood, and other occurrences

uses the immense sums annually paid into the system for the government's current expenditures, including the welfare system and its numerous programs

what guarantees an investor the amount if his original investment plus a specified rate of interest by a certain date

what combines the resources of all its shareholders and invests the money in a variety of areas

what allows investors to receive a fixed amount in cash dividends if the company makes enough profit in a year to pay them

what allows investors to vote concerning corporate matters

what are shares of a corporation's profit

what term refers to the protection that if a corporation fails or declares bankruptcy, the individual stockholders do not personally have to pay the firm's creditors

money is immediately withdrawn directly from the person's bank account

financial institution that loans money for each purchase

money supply category most narrowly defined

assets that can be easily converted into M1 because they are highly liquid

consists of M1 and time deposits less than $100,000

M2 and time deposits more than $100,000
and
most broadly defined

which money supply categories are considered to be liquid money