ECON

• investment is a purchase that is completed with money that has the potential to produce income or a profit.
• Consumption is when you purchase something with the immediate intent of personal use and with no expectation that it will generate money or increase in value.
• An investor is a person or entity who outlays capital in order to produce an income or to make profits. 
• Investing is the act of putting forth capital with the expectation of income or profit
• Personal investing is buying financial securities or property for the purpose of making a profit. 
• Fixed income investments are investments that provide fixed periodic sources of income over a certain period of time
• Variable income investments are forms of investment that are suitable for risk tolerant individuals. 
• Interest rate – represents the cost of using or borrowing money. 
• Loanable funds – refer to the amount of money lent out by a lender to a borrower will pay an interest rate to the lender for the use of that fund. 
• Determinants of Investments:

  • Future expectations
  • Level of economic activity
  • technological change
  • public policy
• Rent - It is typically referring to the use of property for a certain amount. 
• Economic rent - It is a payment in excess of opportunity costs.
• Rent on land - Land is one of the most common type of investments aside from owning shares, cash and securities 
• wages- a fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker. 
• minimum wages - amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement
• labor demand - when the price of labor increases, the related quantity of labor decreases. This means that employers will hire more people when wages go down. 
• labor supply - if the price of labor increases, then the supply of labor also increases
• taxes - it is a lifeblood of the government. 
• Taxation - It is the act of levying tax so that the sovereign, through its law- making body, can raise income to defray the necessary expenses of the government. 
• direct taxes - are taxes levied by government on the income and wealth received by households and businesses to raise government revenue and to act as an instrument of fiscal policy. 
• individual income tax - are taxes that are levied on households. These are taxes on particular persons. 
• corporate income tax - are taxes on businesses
• indirect tax - These are taxes levied by government on goods and services to raise revenue and to act as an instrument of fiscal policy.
• value-added tax - taxes included on goods and services  
• excise tax - taxes included on certain products
• progressive tax - These are taxes that place greater burden on those best able to pay and put little to no burden of the poor. 
• proportional tax - These are taxes that place an equal burden on the rich, the middle class, and the poor.
• regressive tax - These are taxes that fall more heavily on the poor than on the rich
• Adequacy - Taxes should be just enough to generate revenue required for the provision of essential public services
• broad basing - Taxes should be spread over as wide as possible to all sectors of the population or economy to minimize individual tax burden. 
• compatibility - Taxes should be coordinated to ensure tax neutrality and meet the overall objectives of good governance. 
• convenience - Taxes should be enforced in a manner that facilitates voluntary compliance to the maximum extent possible. 
• earmarking - Tax revenue from a specific source should be dedicated to a specific purpose only
• efficiency - Tax collection efforts of the government should not cost an inordinately high percentage of tax revenues. 
• Equity - Taxes should equally burden all individuals and entities in similar economic circumstances. 
• Neutrality - Taxes should not favor any one group or sector over another and should not be designed to interfere with or influence individual decision-making. 
• predictability - The collection of taxes should reinforce their inevitability and regularity. 
• restricted exemptions - Tax exemptions must only be done for specific purposes and within a limited period. 
• simplicity - Tax assessment and determination should be easily understood by an average taxpayer. 
• businesss - relating to any activity of creating, buying or selling any kind of commodities or even providing services to prospect buyers or clients.