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Economics (Microeconomics (Practical personal info (Mortgages (Fixed rate-…

- - - - Taxes
    - - health insurance life insurance and stuff
    - - Fixed rate- rate desnt fluctuate, good credit score, easy to pay off
      - adjustable rate- rates fluctuate, given with bad credit score, harder to pay off.
  - - - slight influences to change people's behavior
  - - - Scarcity drives demand
    - - people will always choose to maximize utility
        
        utility is a unit of pleasure
      - Diminishing marginal utility- as you do something more, utility decreases
    - - causes someone to not do something
      - perverse - an incentive with unintended consequences
      - causes someone to do something
    - - Line represents maximum production
      - inside is less than maximum
      - outside is impossible
  - - - Law of Demand- The higher the price the lower the demand and vice versa
      - Demand shifters
        
        Change in population of consumers, Change in income, Change in price of related good, Change in expectations of future price, Change in consumer information, Change in trust and preferences
    - - Law of supply - As price goes up so does quantity supplied
      - Supply shifters
        
        Costs of pruduction, # of producers, Technological Changes, Future expectations of price
- - - - C+I+G+(E-I)=GDP
      - Consumer spending, Business investment, government spending, (exports - imports)
      - Pros- It's a number that's easy to quantify
      - Cons- It doesn't take into account quality of life
    - - The wealth and resources of an available region
      - Sectors
        
        Primary
        
        Natural Resources
        
        Secondary
        
        Making stuff from natural resources
        
        Tertiary
        
        Selling stuff that's made by other people, All service jobs
        
        Underground
        
        Anything that isn't counted in GDP.
    - - Ways to Measure Inflation
        
        Consumer Price Index
        
        A collection of prices on a bunch of different but necessary goods. Used to measure inflation
      - An increase in prices of all goods and services in an economy
    - - people without a job and currently looking for a job/ total labor force
      - Cyclical
        
        Caused by recession
      - Frictional
        
        People in between jobs
      - Structural
        
        peoples jobs becoming obsolete
  - - - Fiscal policy is the government raising or lowering taxes
        
        Expansionary
        
        lots of government spending on stuff
        
        Government increases money supply
        
        Cut taxes
        
        Contractionary
        
        Government decreases money supply
        
        Raise taxes
        
        Prevents economy from overheating
      - Deficit is how much money government spends minus how much they take in
        
        Debt is money govt owes
    - - Government changes money supply
        
        Marginal Propensity to Consume
        
        how much of income is spent vs saved
        
        multiplier 1/1-mpc
        
        Change in GDP is initial spent x multiplier
        
        Debt is money govt owes
        
        Deficit is how much money government spends minus how much they take in
      - Federal reserve
        
        Government bank
        
        7 members 14 yr terms
        
        normal banks can borrow from fed
        
        Goals of fed
        
        maintain stable prices
        
        maximize sustainable employment
        
        tools of fed
        
        Change the interest rate that banks can borrow money for (discount rate)
        
        Change amount of money banks have to hold onto (reserve requirement)
        
        Open market operations - buy and sell fed bonds
        
        pay banks interest on reserves
      - Fractional Reserve Banking- some money is withheld in banks while the rest is loaned out
      - Fiat money is what we have today
        
        gold standard meant we had to have as much gold as money
    - - Mbs - lots of mortgages bundled together and sold on stock mkt
      - Credit Default swap - insurance for investment
    - - kaynes said governent should butt in. People will hold onto their money and not spend it ( fear fairy) unless there is someone to restore confidence
      - hayek government should butt out. The only helping they do is give the economy a temporary sugar rush