101 Things Everyone Should Know about Economics : A Down and Dirty Guide to Everything from Securities and Derivatives to Interest Rates and Hedge Funds - And What They Mean for You

by Sander, Peter

• ISBN13: 9781440503504
• ISBN10: 1440503508
• Format: Paperback
• Copyright: 2009-10-18
• Publisher: Adams Media Corp

Summary

What you don’t know about economics can hurt you—now more than ever. This easy-to-understand guide answers all the questions you need to know to secure your financial future, such as: What does it mean to my paycheck when the Fed lowers or raises interest rates? What’s the difference between bonds, securities, and derivatives—and which should I invest in now? What does Keynesian economics have to do with my savings? For those people whose heads spin when reading the business pages of the newspaper, here’s a roadmap through the economic jungle. In simple, plain language, Peter Sander explains how economies work, why they grow, how they contract, and what the government can and can’t do to help them. Most important, he tells you how all this affectsyou—and what kind of changes you’re going to see in your finances as a result.Economics has been called the dismal” science. But it doesn’t need to be gloomy or impenetrable. This book is an essential guide for anyone who wants to understand where the economy is today, where it’s going, and what it means for the rest of us.

Author Biography

Peter Sander is an author, researcher, and consultant in the fields of business, location reference, and personal finance. He has written sixteen books, including Personal Finance for Entrepreneurs, and he is the coauthor of the top-selling The 100 Best Stocks You Can Buy. He lives in Granite Bay, CA.

Table of Contents

Introduction	p. XV
The Basics	p. 1
A Glossary of Basic Economic Terms	p. 1
Economy and Economic Cycles	p. 9
Income	p. 10
Consumption	p. 12
Saving and Investment	p. 14
Gross Domestic Product (GDP)	p. 16
Unemployment and Unemployment Rates	p. 18
Recessions	p. 20
Depressions	p. 23
Business Cycle	p. 25
Deleveraging	p. 26
Misery Index	p. 28
Consumer Confidence	p. 30
Productivity	p. 32
Economic Indicators	p. 34
Distribution of Income and Wealth	p. 36
The Wealth Effect	p. 38
Money, Prices, and Interest Rates	p. 41
Money	p. 42
Money Supply	p. 44
Inflation	p. 45
Deflation	p. 48
Stagflation	p. 49
Interest Rates	p. 51
Prime Rate	p. 54
Yield Curve	p. 55
Risk Premium	p. 57
Bond Prices vs. Interest Rates	p. 59
Gold Standard	p. 60
Banks and Central Banking	p. 63
Commercial Bank	p. 64
Investment Bank	p. 65
Mortgage Bank	p. 67
Central Bank	p. 69
Federal Reserve	p. 70
Target Interest Rates	p. 72
Fed Open Market Operations	p. 75
Fractional Reserve Banking	p. 76
Reflation	p. 79
Paradox of Thrift	p. 81
Reserve Requirements	p. 82
Loan Loss Reserve	p. 83
Tier One Capital	p. 85
Governments and Government Programs	p. 89
U.S. Treasury	p. 90
Federal Budget	p. 92
Federal Deficits and Debt	p. 96
Tarp	p. 98
Talf	p. 100
Securities Acts of 1933, 1934, and 1940	p. 101
Securities and Exchange Commission (SEC)	p. 104
Federal Deposit Insurance Corporation (FDIC)	p. 105
Government-Sponsored Enterprises (GSEs)	p. 107
Tax Policy and Income Taxation	p. 109
Credit Protection	p. 111
Bankruptcy Law	p. 114
Entitlements: Social Security and Medicare	p. 116
Retirement Plans	p. 119
Unemployment Benefits	p. 121
Health Insurance Protection: Cobra and Hipaa	p. 123
Economic Schools and Tools	p. 127
Fiscal Policy	p. 128
Monetary Policy	p. 130
Keynesian School	p. 132
Chicago or Monetarist School	p. 134
Austrian School	p. 136
Supply-Side Economics	p. 138
Trickle-Down Economics	p. 140
Reaganomics	p. 142
Behavioral Economics	p. 144
New Deal	p. 146
Planned Economy/Socialism	p. 148
Finance and Financial Markets	p. 153
Derivatives and Derivative Trading	p. 154
Asset-Backed Security	p. 157
Collateralized Debt Obligation (CDO)	p. 159
Credit Default Swap	p. 161
Mutual Fund	p. 163
Hedge Fund	p. 166
Private Equity	p. 168
Leveraged Buyout (LBO)	p. 170
Institutional Investors	p. 171
Money Market Fund	p. 173
Credit Rating Agency	p. 175
Stocks, Stock Markets, and Stock Exchanges	p. 177
Bonds and Bond Markets	p. 179
Commodities, Futures, and Futures Markets	p. 181
Currency Markets/Forex	p. 183
Brokers, Broker Dealers, and Registered Investment Advisers	p. 185
Financial Advisers	p. 187
Electronic Trading	p. 189
Margin and Buying on Margin	p. 191
Short Selling	p. 193
Median Home Price	p. 195
Housing Affordability	p. 197
Foreclosure/Short Sale	p. 199
Trade and International Economics	p. 203
Globalization	p. 204
Currency Policy and Exchange Rates	p. 206
Devaluation and Depreciation	p. 209
Foreign Direct Investment	p. 211
Balance of Trade	p. 212
Balance of Payments and Current Account	p. 216
Eurodollars and Petrodollars	p. 217
Trade Agreements	p. 218
Protectionism	p. 220
International Monetary Fund (IMF) and World Bank	p. 223
World Trade Organization	p. 224
G8 Economic Summits	p. 226
Index	p. 229
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