Trade

Trade is one of the most essential topics of economics because it branches into so many other areas and contributes to a country's worth. People trade because they want to acquire something better than what they have or get rid of something that they don't think has value. Some countries have free trade which means it is not taxed or regulated by the government. Protectionism is the name for countries who trade with government regulation. Embargo's are when two countries refuse trade with one another.

There are many advantages to trade. An absolute advantage is when one person or country has the ability to produce more units of a good than another using the same resources. A comparative advantage is when there is a country with the ability to produce a good or service at a lower opportunity cost than another. When a certain business, person, or country has an advantage, others are more likely to buy goods from them because they get goods at a cheaper price. A great example is when a multinational corporation produces a good for a very low cost, then exports it. Advantage is the economic basis for specialization and trade! It also leads to competition which helps to produce lower priced goods and more of a variety.

Information source: Notes
Video: http://www.pbs.org/moyers/journal/10192007/watch3.html
News article: http://journalstar.com/business/article_8805119b-1e7f-5c8a-aa3f-0043fa5b2ddd.html
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Personal Budget

How You Manage your Budget Wisely-
1. Know the Difference between Fixed and Flexible expenses:

Flexible Expenses- Opposite of fixed expense, it is more of a luxury payment such as gas payments, food/grocery payments, or entertainment payments such as movie tickets or football tickets.

Fixed Expenses- A bill that is paid on a regular basis such as mortgage payment, car payment, loan payment, or rent.

2. What's the difference between Compound interest and Simple Interest?

Compounding interest- When adding money to your savings account it accumulates interest over a certain amount of time, compounding yearly in most cases and grows at a faster rate than simple interest.

Simple interest- simple interest gives us an idea of what the amount of money might be pain on a  loan or  what an investment will give us. 

http://www.investorwords.com/1013/compound_interest.html 

3. The importance of saving: 

The importance of saving will help you out most in your future, setting aside a certain amount of money each month or year for your retirement will help you have a stable, liquid amount of money to rely on when your done working. Also saving money and putting it into a separate account could help you out if there ever is an emergency. My advice for anyone is to set aside a small amount of money every 6 months and that money can go towards buying a house or car for your future or even help pay college loans. It is okay to spend money now just as long as you have calculated your fixed and flexible expenses.

 http://www.investorguide.com/igu-article-992-saving-the-importance-of-saving-and-how-much-to-set-aside.html

 http://www.allbusiness.com/personal-finance/3878743-1.html

http://journalstar.com/news/state-and-regional/nebraska/article_0507b600-bf02-5c63-8765-88b82ffa3c56.html

Investments

Stocks: Ownership in a company. Can be bought or sold through a broker.
Mutual funds: Stable set of stocks. Make money long term.
Bonds: Long-term investment. Based on a maturity time frame.

Risk can influence a person's investment decision. If they are willing to lose a little money here or there they might invest in stocks with risk. Other individuals that cannot afford to lose money may invest in mutual funds or bonds.

Time is very important when it comes to investing. For long-term investments, more money is accumulated as more time passes. For stocks on the other hand, a day could make all the difference in someone's investment amount.

Investments differ from savings accounts because they have a higher chance of risk and failure. Savings accounts won't lose money. A small amount of interest is actually paid to the person with the account.

Three tips for investing:
1. Plan ahead, invest to have money for the future.
2. Only take risks you can afford.
3. Have fun!

Source: notes
News article: http://journalstar.com/business/article_669c7f1d-e62f-52fc-a56c-348d248c2360.html
Video: http://www.videojug.com/interview/mutual-funds-types

Buying A Car

The process of obtaining a loan is 1. Pre-Qualification, which a lender gathers information about the income and debts of the borrower and makes a financial determination. 2.Application, this is actually the beginning of the loan process and usually occurs between days one through five of the loan process. 3.Processing, this occurs between days five and twenty of the loan. The processor goes over the credit reports and verifies the borrowers debts and payment histories as the VOD's and the VOE's return. 4. Underwriting, this occurs between days 21 and 30 or sooner. The underwriter is responsible for determining whether the combined package passed over by the processor is deemed as an acceptable loan. 5.Mortgage Insurance, this occurs when the borrower has less than 20% of the loan amount to put towards a down payment. The loan is now submitted to a private mortgage guaranty insurer and this person provides extra insurance to the lender in case of default. 6. Pre-Closing, which occurs between days 25 and 30  this is when a closing time is scheduled for the loan. 7. Closing, this occurs between days 25 and 45 of the loan process. This is where the loan is closed with a cashier's check. This is the time when the borrower finishes the loan process and actually buys the car.

Down payments are the difference between the loan amount and the purchase price, usually paid immediately upon purchase with cash or a trade in. These are important because it is the part of making a major purchase like a car or home. A down payment is a sum of the money that is subtracted from the purchase of your price.

The value changes over time with buying a car because a car is not as good as it was when it first came out the more years that go by the better cars get and the more expensive they get so on one will want to buy a car for just as much as a brand new car.

Three things that every person should know about to buy a car is:
1. Make sure you either pay in cash or get a loan and make sure that you pay off the loan.
2. Get a good down payment
3. If you are going to buy a car and sell it make sure you do it in good time so that the car still has good value.

Information source: www.americanloansearch.com/info-loanprocess.htm
News Article: http://journalstar.com/business/article_15ab540d-0b2a-5508-9e30-15ef152fb583.html
Video: http://www.checkbook.org/auto/carbarg.cfm
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Retirement Financing

Both IRA’s and 401k’s allow people to save up for their retirement. 401k’s are considered traditional because they are sponsored by the employer so employees choose an amount of their paycheck to have distributed into their retirement fund that is managed by the employer. An IRA or an individual retirement account provides tax advantages by allowing individuals to place money for their retirements into an account with a life insurance group.

Social security is a tax funded program that provides retirement funds to those who are retired but do not have sufficient retirement funds on their own. It is government run and also includes insurance for the unemployed. It is a big issue in today’s society because taxpayers sometimes feel cheated that their hard-earned money is going toward a comfortable retirement for someone else.

It is important that working people think about retirement funds as an investment so that we may save up for later in life when we won’t have the ability to continue working for our compensation. It has been proven that if a person begins saving for retirement when they are 19 rather than when they are 27, they will earn more money because of interest to live on when they retire.

 













information source:http://en.wikipedia.org/wiki/Social_Security_%28United_States%29

news article:http://www.huffingtonpost.com/dean-baker/saving-social-security-st_b_799135.html

video: http://www.ehow.com/video_4973057_401k-vs-ira.html

Credit Cards

Credit cards are small, plastic cards that consumers can use as payment. With credit cards, consumers are able to purchase goods and services. They have a continual balance of debt. Some charges associated with credit cards are interest rates, APR, late fees, and over charge. Interest rates can be avoided if holders pay their bill in full each month. If the bill is not fully paid, the holder must pay interest on the remaining amount. APR is the annual percentage rate. It is the rate of interest for the entire year. APR can be calculated by multiplying the rate for a certain pay period by the number of payments in the year. Late fees are charged to holders when payments are not paid on time. Over charge is when the holder charges more to the card than they have. Fees are put in place and vary from company to company.

To apply for a credit card you must first choose a company. Then it's simple. For example, with discover you can online to apply. The steps are laid out and easy.

Pros for owning a credit card: Can spend more money than you have, can receive rewards, can build up good credit.
Cons for owning a credit card: Fraud, debt, over charge.

Three tips for owning a credit card:
1. Pay your bill in full every month.
2. Don't give out your credit card information.
3. Don't hold too many credit cards.

News Article: http://journalstar.com/business/article_948feb5e-5eea-5c54-b2df-7f1f497610df.html

Video: http://abcnews.go.com/video/playerIndex?id=8075403

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Source: http://en.wikipedia.org/wiki/Annual_percentage_rate