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RISK PREMIUM: This has two very closely related uses. First, it's what risk averse people are willing to pay to avoid a risky situation. For example, if you would be equally happy with a guaranteed $900 or a 50-50 chance of getting either $500 or $1,500, then you're risk premium is $100. Second, it's the extra percentage points added to an interest rate to compensate for the risk of a loan. As a general rule, each 1 percent chance of default on a loan adds a risk premium of about 1 percent to the interest rate.
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Lesson 4: Production Possibilities | Unit 4: Analysis
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Page: 18 of 24
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- How full employment is represented by any bundle ON the production possibilities curve and unemployment is represented by any bundle INSIDE the production possibilities curve.
- The production possibilities curve as a frontier or boundary that cannot be cross give current quantities and qualities of resources.
- How the process of economic growth expands the production possibilities curve to reach previously unreachable bundles of goods.
- How economic growth is achieved by increasing the quantity or quality of resources.
- Five important sources of economic growth-the quantity of labor, the quantity of capital, the quantity of materials, education, and technology.
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MACROECONOMICS The branch of economics that studies the entire economy, especially such topics as aggregate production, unemployment, inflation, and business cycles. It can be thought of as the study of the economic forest, as compared to microeconomics, which is study of the economic trees.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store trying to buy either a how-to book on the art of negotiation or a flower arrangement for your aunt. Be on the lookout for neighborhood pets, especially belligerent parrots.
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This isn't me! What am I?
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Al Capone's business card said he was a used furniture dealer.
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"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover." -- Mark Twain
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SWIFT
Society for Worldwide Interbank Financial Telecommunications
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