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Economics- The social science that studies the production, distribution…

- - - - Expansionary- When the economy is doing good and on the upswing
      - Contractionary- The reverse of the expansionary and when the economy is doing bad
        
        Recession- When GDP is down for 2 quarters in a row
    - - MPC- How likely someone is to spend money given to them
      - Fiscal Policy Multiplier- 1/(1-MPC) used to see how much money will multiply and help the economy
      - Expansionary Fiscal Policy- Decreasing taxes to help the economy recover after a bad news
      - Contraction Fiscal Policy- Increasing taxes to cool down the economy or to fight inflation
      - Debt- something, typically money, that is owed or due.
      - Deficit- An excess of expenditure or liabilities over income or assets in a given period. The debt is pretty big so they made a fancy word for it
    - - Contraction period- When the inflation rate is too high the Fed attempts to lower the money supply by increasing interest rates
      - Expansionary Period- When the Fed lowers interest rates to stimulate growth and increase demand to raise the GDP
      - Money words
        
        Fiat Money- Paper that is only given value by the government's decrees and whatnot
        
        Gold standard- the system by which the value of a currency was defined in terms of gold, for which the currency could be exchanged. The gold standard was generally abandoned in the Depression of the 1930s.
        sorry
        
        Unit of Exchange- When money is used to be exchanged. Unit= thing
        
        Unit of Account- When you use money to compare and contrast two different things (expensive car vs. reliable affordable car)
        
        Store of Value- When money can be stored and taken out over time, something that retains value over time
      - Fractional Return Banking- When the bank is required to keep a certain amount of money in the bank so they don't run out (or so the Fed can take it if they need it)
      - Federal Reserve- America's central bank and the leader of the monetary branch of stuff. They are a bunch of non-political econ nerds who could blow up the world. They have the dual mandate, and they want good employment numbers and to keep prices good.
        
        Tools of the Fed
        
        Reserve Requirements- They can ask banks to hold onto more money so that the banks have less money to hand out so that the economy can cool down
        
        Discount Rate- The minimum interest rate set by the Fed for lending to banks. When recession, really cheap money for the economy and good times.
        
        Open Market Operations- The fed can buy peoples treasury bonds if they want more money in the economy fast, and sell them if they want less money
      - 2009 Recession- Great Recession caused by the banks being dumb and selfish
        
        Credit Default Swap- Insurance for credit
        
        Mortgage Backed Security- A whole bundle of mortgages
      - Keynes V Hayek- Old dudes who think differently on economics. One of them says the government should help stimulate economy after a recession and the other says they should stay out
        
        Animal Spirits- The bull is when we are all confident and think we are doing good (expansionary) and the bear is when there is bad times (recession/contraction)
        
        Paradox of Thrift- When the economy is bad, everybody holds onto their money and that is bad news bears
        
        Fiscal/Monetary Sugar High- When the economy needs help so the government helps but it could make the bad worse
- - - - Normal goods- Rich people stuff that people want like fancy cars
      - Inferior Goods- The next best thing that you can afford when poorer like Kroger cereal people just settle for that
    - - Surplus- When fewer supplies are used than when retained. Usually happens when the prices are too high and there isn't a ton of profits.
      - Shortage- When the prices are too low and the demand is too high. When the supply runs out and everybody is sad.
    - - Price Ceilings- When the government limits the price of an item
      - Price Floors- Lowest leagal price set (like minimum wage being raised)
  - - - Land- The space that you need to be efficient.
      - Labor- The employees that you use to be efficient in production
      - Capitol- Money that you use to fund your means of production
- - - - Marginal Tax Rates- The thing with the tax brackets that are designed to take more money from the real rich people and less money for the poor people
      - State Tax- Flat rates for stuff like roads and on things like food and pot and property so that the state can fund itself better
      - FICA Tax- Tax comprised of three separate things, defense funding as well as social security and medicare
      - Deductions- an amount that is or may be deducted from something, especially from taxable income or tax to be paid.
        
        Mandatory Deductions- An amount that is required to take off of taxable income when filing for taxes.
        
        Voluntary Deductions- Amounts deducted for 401k's and stuff like that