Investing 101

Stock



I chose to use a picture of a piece of pie because owning stock is like having a little slice of the company, the more stock you purchase, the bigger percent of the company you own.


Bond

I chose to use a pinky promise because a bond involves borrowing money and then promising to pay it back later on. If you don't pay it back, you risk paying even more or legal issues.


Primary and Secondary Market

I chose to use this picture because it represents companies competing to get more business. In this picture, honey bees bring more honey to impress the queen bee.

Bulls and Bears



I chose this picture because they represent opposites, just like bears and bulls are opposite. Bulls are optimistic about the market while bears are pessimistic.


Selling Short


I chose this picture because it represents selling short, which is when the company benefits from the price of a stock falling. In a pawn shop, usually people sell their belongings and then buy it back for cheaper later.

Franchise


I chose to use these wooden dolls because a franchise is a smaller part of a large corporation, but are still the same.

Underwrite/Underwriter/Going Public


I chose this picture because it represents going public with someones engagement, just like going public in a market economy.

When I'm 30...

     Now that I am 30, here's where we are economically; we have continued on the same economic path that we have been for the last 10-12 years.  We still have a giant deficit, and the economy is very slow to improve.  Its very hard to pay off student loans because students just don't have the money to do so, and nobody can help with it because no one has the money. Struggling Individuals and families are forced to pay for a college education, yet don't have the money, so they are stuck with the burden off taking out loans and paying these loans off for many years.  Its hard for kids to pay for schooling, so they are having to take out loans, which take years and years to pay off.

     Due to the weak economy, it is almost impossible for people to find jobs, especially whom are right out of college.  People are forced to make lifestyle changes like finding a cheaper place to live, sell their cars, and spend less due to the fact that they have very little income.  It is very hard on people because they don't know what to do and they can't do much to improve it by themselves.  The economy has gotten worse, but it has stayed about the same for the past two or three years.  In order to improve our economy and our massive deficit of $21 trillion, people are going to have to make much smarter choices financially.  Due to the great amount of debt, businesses are struggling which ends up effecting the general public.

Manifesto 2.0

1. The governments role in the economy should be to create a balance between taxes, businesses, and the private sector that helps promote economic stability. When taxes increase, the private sector stops putting money into the economy, which in turn leads to the downfall of small businesses. Finding this balance is difficult, but worth it in the end. Investorguide.com supports my opinion when it says "the role of the US government in the acquisition and redistribution of money in society is central to understanding the relationship between resources and the citizenry." This relationship that the government is trying to build is difficult due to the vastness of the federal government and the programs needed to maintain a stable economy.

2. I do not agree with how much money is being taken from individuals' income. I believe that increasing taxation in any portion is the wrong way to go, unless the income for that family is well over the normal range. Instead, the government should tighten the loopholes that many corporations have found that decrease the amount of taxes they are paying. Large corporations spend a lot of money on accountants to find loopholes when they could have just paid the taxes that were due.

3. First, I do not think that any cuts should be made to the Medicaid, Medicare, or Social Security programs. These programs are already at a point where our older population can barely live within our own economy. One of the areas that could be decreased is the defense budget. I know it is very important to defend our country, and hopefully we won't need to be having so many of our own over seas for much longer. The defense program has the third highest cost to run every year. The other area is the discretionary funds. At certain times in our economy, some programs that are not a necessity to the American people should be decreased.

4. One of the major choices I made for the Federal Budget Challenge was cutting $852 billion on War Spending. Seeing that we will be leaving the middle east sometime in the near future, spending more money on military ships and missile defense systems is unnecessary. Another area I chose to save money in was Taxation. I believe taxes should be increased for those who have a higher income as well as corporations paying their fair share.

5.   My picture is of someone carrying the weight of taxes on their shoulders. This represents the burden of paying high taxes. Taxes are necessary for the funding of our social services, but finding the balance so Americans can feel like they can put money back into the economy is key.

Taxes

Progressive:

pros: Some believe that the progressive tax code ensures that the wealthy pay their fair share in taxes. It helps make sure that those who have the highest income are asked to contribute more, and helps those who can't afford to pay taxes and keep a roof over their head at the same time be able to keep some money for themselves. This method could help the economy by keeping more families afloat. <"A progressive system distributes the risks of economic changes by basing a family's tax burden on their ability to pay.">

cons: Progressive taxes discourages economic growth by burdening high-income earners. Taxing high income earners more money only decreases their wealth, which would decrease how many high income earners there are. Also, raising taxes would kill job creation. The more money you take away from the rich, the less money they have to strengthen the economy by starting their own businesses and making investments. Taxing the rich to benefit the poor is also sending a bad message. It's  basically saying that you don't need to work hard because other people are working hard for you. The wealthy people worked hard for their income and don't want to give it away to someone who doesn't give an effort. <"We're running out of rich people to tax by taxing the few surviving millionaires into oblivion.">

I oppose to this tax because even though the wealthy people of the nation could probably still do well with a progressive tax system, it isn't fair to them to pay more.

Flat:

pros: All incomes under a flat tax are taxed at the same rate. Also, only a person's wage income would be taxed. The flat tax code also usually exempts lower incomes entirely. The flat tax rate is so attractive to many because of its simplicity. It also eliminates loopholes for wealthy people who hire accountants who know how to take advantage of existing loopholes. The flat tax code also emphasizes work, savings and investing, and inherit fairness. <"Fairness is the greatest virtue of the flat tax, no matter how much money you make, what kind of business you are in, and whether or not you have lobbyists in Washington, you will be taxed at the same percentage as everyone else.">

cons: Wealthy people could end up not paying any taxes if they get their income from dividends and capital gains. Since only the income wage is taxed, the lower class could still be paying 17% while the wealthy is paying 0%. Opponents argue that the only people pushing for a flat tax rate are the wealthy because they would benefit from it the most. <"Every Republican flat tax we have seen either explodes the deficit or raises income taxes on middle income families.">

I oppose to this tax because it would not benefit the population as a whole.

National Sales:

pros: National Sales tax is a much simpler way of taxing. It would also eliminate any problems with the current tax system. Also, this tax would create a fair market for corporate and noncorporate companies and allow them to make decisions regardless of taxation. < It would get rid of the differential tax treatment of corporate and noncorporate businesses, since under the current system, corporate earnings are taxed twice- once when the corporation is taxed on income, and again when dividends are provided to share holders.">

cons: Some believe that this tax would cripple the American lower class by the wealthy not having to pay as much as the middle and lower class. The middle and lower class spends so much time trying to make ends meet, that if the government used the National Sales Tax, then it would be unfair to them.<"Replacing most federal taxes with a national sales tax would cause large tax increases for most Americans while allowing huge tax cuts for the wealthiest.">

I oppose to this tax because it puts more strain on the middle and lower class, which makes up more of our population than the wealthy do.

VAT:

pros: A big advantage of the VAT is that it helps keep corporate taxes down. Keeping these taxes down helps the U.S. become bigger in the international market. Also, it could help pay off the national debt in the long run. <"The size and complexity of domestic and international corporate taxes are indeed a problem in the United States of America, VAT could well relieve some of those issues.">

cons: The problem with VAT is that the middle and lower class would be taxed 5% on everything they buy, so prices would be higher for necessities. Raising prices like this would keep customers away from buying from the american market. Another reason to be against it is that the price doesn't change. <"Being a tax on consumption, its a regressive tax, one that is disproportionately burdensome on the poor and middle class.  The lower a persons income, the greater the proportion of that income that goes into products and services.">

I support this tax because it has the best chance of helping the U.S. with the national debt. 

The Big Picture

I recommend to the President's economic advisers that they should focus on decreasing funding on federal programs that do not benefit the majority of the national population. This would increase the economy and help focus spending on things that would help more people. They should also delegate spending in areas that would increase jobs. This would also help the economy in the long run, as well as open jobs up for people so they can make an income and pay taxes.

The President claims that "our children are our future". So they should put more effort into making sure that education is funded adequately. Decreasing funds toward education would negatively affect how students would continue to learn. The government should continue to maintain funding towards education so that the children of today's society continue to learn and grow into responsible tax-paying citizens when they come of age.

Sequester

The sequester is a series of automatic, across-the board cuts to government agencies. This is used to get a handle on growth of the U.S. National Debt, which the CNN article states is up to about $16 trillion right now. The sequester will be taking place over the next 10 years, which will add up to about $1.2 trillion dollars in cuts. This all started in 2011 when Republicans in Congress demanded spending cuts in exchange for giving the Obama administration enough money to pay off government duties. As stated in the CNN article, people believe its "the first chance we have for real savings and deficit reduction."

This year, there will be $85 billion in cuts over the next 10 months. The ABC article stated that most government programs will be cut and the money will be distributed evenly throughout defense and nondefense programs. Important domestic programs such as Social Security and Medicare will not be affected by these cuts. Another name for the sequester is the Budget Control Act, or the BCA.

One thing that will come negatively from this is job loss. The Washington Post stated that there will be 2.14 million jobs lost from cuts to companies. Supposedly the sequester is going to help the economy, but it could also damage it in some areas. Job loss would be a huge task to get back on track if the sequester was going to continue for 10 years. But in the long run, the sequester could help the economy by controlling the massive debt that we have.

Manifesto Beta Version

I believe that the government should focus their efforts on developing and further growing the economy. As long as businesses are thriving, more people have jobs; which helps the economy. The government shouldn't restrict businesses but give them more options  in order to help and stay afloat. If more people see that businesses are doing well, then people would be more likely to enter the business world. More businesses means more jobs and also fewer unemployment.

Economics Research Spring Project

https://docs.google.com/presentation/d/173utsCE3q-ZXRWsGzwjH3iQXSs-nm-krLoC6xtFv9B4/edit?usp=drive_web#slide=id.p

Supply Wrap Up

$            #S
1.00        10
2.00        20
3.00        30
4.00        40
5.00        50

inelastic:

elastic










$                #S          S increase      S decrease
1.00            10          15                  5
2.00            20          25                  15
3.00            30          35                  25
4.00            40          45                  35
5.00            50          55                  45

Annotated Bibliography

How did the Bill and Melinda Gates foundation come to be and what is their central goal?

1) "Making the Most of Your Holiday Giving." Making the Most of Your Holiday Giving. N.p., n.d. Web. 21 Mar. 2013. <http://www.thegatesnotes.com/Personal/Making-the-Most-of-your-Holiday-Giving>.  

This source was important in my research because it allowed me to further understand how much Bill and Melinda Gates fundraise and donate to people less fortunate than themselves. This website gave me a better view on how much their charities and organizations actually help people, which follows their main goal in their company. So therefor, this information will help me be able to go into detail about everything that Bill and Melinda do for the world.

This site will also be helpful in understanding all the aspects of the Bill and Melinda Gates foundation. I can also compare the differences in the charities from in the past to now and what advancements they have made as a company. This will help get my point across for my final project. Also, learning more about the issues of the world will give me a better knowledge for when the time comes to talk about it.

2) "Bill & Melinda Gates Foundation." Bill & Melinda Gates Foundation. N.p., n.d. Web. 20 Mar. 2013. <www.gatesfoundation.org/>

Bill and Melinda Gates were both raised knowing that it’s important to give back to the community. They started their own foundation, the Bill and Melinda Gates Foundation, in the year 1997. Since then, they have invested over $36 billion dollars helping people all over the world fight deadly diseases. The foundation also helps build better communities, and make advancements in both medicine and education. Bill and Melinda Gates also encourage wealthy people to put their money to good use and help people that are less fortunate.

The information found on this website can be useful in discovering the history of how the Bill and Melinda Gates foundation came to be and exactly how much has been invested. Also, the website gives very descriptive details about each project and how they are being kept up. There are financial records and annual reports on how each of the programs are being run. I never knew how much money and time was being invested in this outstanding program before I visited their website. After researching, I discovered that Bill and Melinda Gates are very dedicated to changing the world.

3) "Bill & Melinda Gates Foundation." WHO. N.p., n.d. Web. 21 Mar. 2013. <http://www.who.int/pmnch/members/list/gates_foundation/en/index.html>.

This website helped me answer my central question, which was, ‘How did the Bill and Melinda Gates foundation come to be and what is their central goal?’. I got their mission statement which says, “Guided by the belief that every life has equal value, the Bill & Melinda Gates Foundation works to help all people lead healthy, productive lives. In developing countries, it focuses on improving people’s health and giving them the chance to lift themselves out of hunger and extreme poverty. In the United States, it seeks to ensure that all people-especially those with the fewest resources-have access to the opportunities they need to succeed in school and life.”

I chose this website as a source because it had the direct answer to the second portion of my central question, which in my opinion is the most important. Bill and Melinda Gates really do follow and respect their mission statement, and having that along with information about all of the programs and donations they put together will really help me understand and explain the history and future of the Gates Foundation.

Demand Reflection

Vocaroo

Demand Wrap Up

Part 1:

Utility:
- The ability for a good or service to be useful to the consumer.
- The utility of coffee would be giving the consumer more energy.

Complementary Demand:
- Products that increase or decrease the demand for another product.
- Soccer balls and soccer cleats are an example of a complementary demand.

Substitute Demand:
- Products that compete against each other that can be used instead of the other.
- Instead of drinking coffee, consumers could just go to bed earlier to get enough energy for the day.














Elastic Demand:
- Demand for the product is changed drastically when the price changes.
- If all coffee drinks suddenly rose to $10 a cup, then consumers would stop demanding it.

Inelastic Demand:
- Demand for the product does not change drastically when the price changes.
- If the price of gas goes up, consumers have no choice but to demand it because they need it.


Part 2:

Elastic Demand Schedule:

$	#D	TR ($)
20	800	16,000
30	120	3,600
40	80	3,200
50	3	150
60	1	60

Inelastic Demand Schedule:

$	#D	TR ($)
1.50	150	225
3.00	125	375
4.50	100	450
6.50	75	487.50
9.00	60	540

Part 3:

Increase:

$	#D	D1
1.50	150	155
3.00	125	130
4.50	100	105
6.50	75	80
9.00	60	65

Decrease: 

$	#D	D1
1.50	150	140
3.00	125	115
4.50	100	90
6.50	75	65
9.00	60	50

Changes in the Demand Environment

Factor: Complements


The product being used are toothbrushes. When there is an increase in demand for toothbrushes, there tends to be an increase for toothpaste as well. As you use your toothbrush at least twice a day, the bristles can become frayed or will lose its structure. Toothpaste is also used the same amount as your toothbrush, which can run out quickly depending on how much toothpaste you use per brushing. When companies figure out a way to prevent toothbrushes from losing their shape, the demand will fall. Also, new inventors have come up with a toothpaste dispenser that distributes the same amount of toothpaste every time so young users do not make a mess. With this new invention, the demand for toothpaste will also decline.

Increase for toothbrushes

$	#D (Original)	D1 Increase
$1.00	55	100
$1.50	40	80
$2.00	25	60
$2.50	10	40
$3.00	5	20

Factor: Consumer Income

As items become more expensive, consumers tend to decrease their demand for it. A reason for the decrease in demand has to do with the consumers income. If he/she does not make enough money to keep buying the product, then he/she will have to stop buying so much or stop buying the product altogether. The demand schedules will show how the demand for the product, coffee, will decline when the price goes up.

	$ #D (Original) D1 (Decrease) $1.00 5 4 $3.00 4 2 $5.00 3 1 $7.00 2 0 $9.00 1 0

Demand Headlines

Complementary: "Jennie Finch launches new bat company, sales get hit out of the park!"

Substitute: "MLB season cancelled, MLS ticket sales score big."

Elastic: "Ghirardelli chocolate prices rise, sales melt."

Inelastic: "Milk costs go through the roof, although utterly ridiculous, consumers still buy."

Milk is inelastic because even though prices may be high, consumers still use milk every day. You could substitute it for soy or almond milk which may be much cheaper, but it is not considered real milk to those die hard dairy fans. We interviewed consumer Sherri Hill about the controversy of raised milk prices. When asked if she would switch to another brand, she said, "Never will I ever switch. It may be expensive, but I've been using this milk since I was a kid. I could not imagine using any other type of milk." As you can see, consumers can try to avoid using this absurdly expensive milk, but in reality, milk is used in countless recipes; breakfasts, lunches, and dinners. Milk is unavoidable, and any other substitutes do not have the same taste or quality of regular milk. Even if milk becomes very inexpensive, consumers cannot buy a lot of milk at a time; because even if you use a lot of milk in your household, the longer you let milk sit in the back of your fridge, the worse it gets. Milk can easily go bad if you do not pay close attention to the expiration date, so be good to your milk!

Demand and Utility

1. I would purchase coffee in order to give me energy throughout the day.

2. I would also get a new shirt to go with a pair of pants I purchased earlier.

3. I would also purchase a new softball bat to replace my old one because it has lost its pop.

Market Economies

  I support Market Economies because it gives everyone the freedom to do what they want with their company/business and meets the needs and wants of consumers.
  Some strengths are: able to adjust to change gradually, individual freedom for everyone, lack of government interference, incredible variety of goods and services, decentralized decision making, and high degree of consumer satisfaction.
  Some weaknesses are: it only rewards productive resources does not provide for people too young, too old, or too sick to work, workers and businesses face uncertainty as a result of competition and change, does not produce enough public goods such as defense, universal education, or health care, and must guard against market failures.

Opportunity Cost

Yesterday my sisters and I went to Starbucks, where I had to choose between getting a smoothie or a coffee drink. If I chose the smoothie, I would be choosing the healthier drink. Also, it wouldn't keep me up all night like coffee would. If I chose the coffee drink, I could get my favorite flavor, vanilla, put into it. I had decided earlier that day that I was going to try to go to bed early. So in the end, I chose the smoothie because it was healthier and it wouldn't keep me up all night.

Scarcity

   I chose bobby pins as something that is scarce in my life. I chose these because I always lose them and have to go buy a whole new pack. I usually use multiple bobby pins at a time, so when I lose that group I have to go get another group. Then I lose those, and so on.