2.  Central Bank of the United States  Regulates the money supply in the US economy › Raises and lowers the discount interest rate › Puts money into circulation › Removes money from circulation

3.  If the Federal Reserve raises the discount rate › Consumer credit becomes more expensive › Consumers buy fewer large goods— refrigerators, boats, etc.  If the Federal reserve lowers the discount rate › Consumer credit becomes less expensive › Consumers buy more expensive goods—cars, washing machines, etc.

4.  Stocks are shares of ownership in corporations  Shareholders have partial ownership in the corporation  Corporations are permitted to sell stock to raise capital for the corporation  Shareholders may receive dividend payments from the corporation

5.  Bonds—loans made by the investor to the issuer; the investor is repaid with interest › Corporate Bonds › Municipal Bonds › Treasury Bonds › US Savings Bonds  Futures—agreement to buy or sell a commodity (oil, gold, etc.) at some point  Mutual Funds—combination of individual stocks  Stocks, Bonds, Futures, and Mutual Funds are called Securities.

6.  The stock market is where shares of stocks, bonds, and futures are bought and sold (or traded). (Can be electronic.)  The stock exchange is the actual physical location where stocks are listed and traded. › New York Stock Exchange (NYSE) › American Stock Exchange › NASDAQ—virtual exchange

7.  Provides companies with a way of issuing shares of stock to people who want to invest in the company. The sale of shares of stock is a way for the corporations to raise money.  Provides a place for the buying, selling and trading of stocks (and other securities).

8.  Bull Market › Stock prices going up or rising › Consumers are optimistic and buy stock hoping to earn more money › Consumers buy goods and businesses prosper  Bear Market › Stock prices are going down or falling › Consumers are pessimistic and reluctant to buy stock › Investors sell stock so they won’t lose more money › Consumers buy fewer goods and businesses may lose money. Some workers may lose jobs.

9.  Because consumers can purchase goods on the Internet they have more choices in goods.  Global competition is increased and US businesses must compete globally.  Fewer salespeople are needed in stores—a shift in jobs is required. More people are needed in order fulfillment and customer service.  Goods are manufactured just-in-time—as they are needed for distribution.