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EconoTerms S
Securities
Securities are evidence
that you own something. Examples are stock
certificates and bonds.
Stock
A stock is basically a small piece of a
company. When you buy a stock, you own a very
small fraction of that company, so you are
entitled to a very small fraction of the
company's profits. If you buy a stock and a
company makes money, you're in good shape. If the
company starts having problems, you'll lose
money. Buying stocks is an investment, but it's
also somewhat like gambling. Any time you buy a
stock you're taking a risk. Blue chip
stocks are stocks of large, secure companies, so
if you invest in them there isn't as much chance
of losing money. On the other hand, you might
make money faster from more volatile stocks, but
you also risk greater losses.
Subsidies
Money payed by the
government to a citizen or a business to
stimulate the economy (see demand-side
economics) or to
keep the standard of living high.
Supply
side economics
This theory, used by
President Ronald Reagan in the 1980s, suggests
one way in which a government might control
inflation. The government lowers taxes on
corporations, meaning that they have more money
available for investment. Theoretically, the
corporations will invest more, raising production
and stimulating the economy in general. Bolstered
production lowers prices, and thus combats
inflation. Supply-side theory is called
"supply-side" because it is designed to
increase the supply of goods, not increase
demand. Demand side theory would give
the public subsidies to increase demand.
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