Chapter 10 Notes Economics

Chapter 10 notes Economics

02/05/2007 12:53:00

Ch 10 Production- takes time • rely on money made from previous years to continue production • investment= time and money o must weigh opp. Cost of new product • Consumption- time o Am. Value present consumption over future consumption  EX: one hour photo. (pay more to get right away) o Loan- Present consumption o Intrest- percentage of what you borrow  20,000  5%

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 21,000 o IR low- Loan demand goes up Diversify – to take out from other peoples money deposited Credit- your ability to borrow Risk o Prime rate (lowest interest rate possible)  Large businesses  Perfect credit Collateral- asset that bank holds until loan paid o EX: house