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Economics (Behavioral (Choice Arcitecture (A person or Organization that…

- - - - Giving up the next best thing
    - - Land
      - Labor
      - Capital
    - - Positive
      - Negative
      - Perverse
    - - Marginal Analysis
        
        Cost/Benefit analysis
        
        number of slices of Pizza v. what it is worth too you.
        
        Utility Maximization
        
        the maximum efficiency of production
    - - The maximum amount a producer can produce of a good given the resources.
  - - - Gross Pay (total)
        
        Net Pay (after tax)
    - - Tax Brackets
        
        FICA Tax
        
        Social Security
        
        Deductions
        
        Mandatory Deductions (Social security, taxes)
        
        Voluntary Deductions (healthcare, union)
    - - FICO Score
    - - Predatory
      - How they work
    - - Adjustable Rate (SUB Prime)
      - Fixed Rate
  - - - Law of Supply
      - Supply Shifters
        
        Number of producers/sellers in an area (farm)
        
        Cost of Production
        
        Change in Technology
        
        Future Expectation of Price (Stockpile of Soybean)
    - - Law of Demand
        
        20/80 rule
        
        20% of the people use 80% of the product
      - Demand Shifters
        
        Change in Population of Available Consumers
        
        Change in Income
        
        Change in price of a related good
        
        Change in expectations about future price (IKEA)
        
        Change in Consumer information
        
        Change in tastes of preferences (trends)
    - - Surplus
        
        High supply low demand
      - Shortage
        
        high demand low supply
      - Price Floors
        
        Floors are high (Minimum wage)
      - Price Ceilings
        
        Ceilings are high (rent controll in SF)
      - Price Elasticity of Demand (PED)
        
        Factors of PED
        
        Time Horizon
        
        Consumer Budget
        
        Close Substitue
        
        Necessity vs. Luxury
        
        PED Equation (%ChangeQ)/(%ChangeP)
        
        PED>1 Elastic
        
        PED<1 Inelastic
        
        PED=1 Unitary
    - - Normal
        
        If income goes up then you will buy more of it
      - Inferior
        
        If income goes up you will buy less of it.
- - - - Expantionary
        
        Growing GDP
      - Contractionary
        
        Recession -GDP
    - - Marginal Perpncity to consume (MPC)
        
        the likelihood of a particular demographic to spend the money gained. teens= super high MPC rich=low MPC
      - Fiscal Policy Multiplayers (government spending will multiply)
      - Fiscal Contractionary
      - Debt (the total amount we as a nation owe)
      - Deficit (the amount the government spends is more than the amount they bring in every year)
    - - Contractionary
        
        ex. Raise interest rates to the banks
      - Expationary
        
        ex. Lower interest rates to the banks
      - Types of Money
        
        Fiat (worth something because we say it is)
        
        Gold Standard (worth a fraction of gold)
      - Functions of money
        
        Unit of exchange (spending)
        
        unit of account (unit to compair to)
        
        store value (accumulate value)
      - Fractional Reserve Banking and the Money Supply
        
        The Fed
        
        7 members 14 year term exempt from politics
        
        Duel Mandate
        
        Maximize sustainable employment
        
        Maintain Stable prices (limit inflation)
        
        Tools of the Fed
        
        Reserve Requirement (the amount of money banks are required to keep and not loan)
        
        Discount rate (interest that the government charges the banks)
        
        Open Market Opperations (Buying Government securities)
        
        Paying Interest on excess reserves
    - - Mortgage Backed Security
        
        A bundle of mortgages sold to banks which banks then evaluate based on risks, then package them and sell to the public.
      - Credit Default Swaps
        
        Insurance on a mortgage backed security
    - - Keynes
        
        Animal Spirits (Bear Bull)
        
        Paradox of thrift.
        
        When recession hits people sit on their money making things worse.
      - Hayek
        
        Fiscal and Monetary Sugar high (More Money More Problems)
  - - - The wealth and resources of a country in terms of spending and services.
      - Sectors of the Economy
        
        Primary Sector (Harvesting of raw materials)
        
        Secondary (Manufacturing)
        
        Tertiary sector (Everything else) Service, retail restaurants.
        
        Underground (Illegal, Babysitting) Non Official
    - - GDP=C+I+G+NX
        
        C= Consumer Spending
        
        I= Business Investment
        
        G=Government Spending
        
        NX=Net Exports (exports-imports)
    - - The tracking of basic goods to predict and understand inflation
    - - Types of Unemployment
        
        Frictional (between jobs)
        
        Cyclical (laying off due to recession)
        
        Structural (Robots)
      - What is unemployment
        
        % of people looking for work that cant find it.
      - Natural rate of unemployment is 4-6%