Dow down 416 pts! - Why?

This Tuesday the Dow Jones Company experienced a downfall of stocks that left everyone in shock. The Dow Jones is a group of major stock companies that have all came together and since the Chinese stock market experienced a decline of about 9%, it caused other companies as well as the overall Dow Jones to experience an unexpected decline. Even though the decline was rather sudden, we knew that some decline was inevitable knowing that we hadn't had one since September 11. So the decline was bound to happen sooner or later. Tuesday's decline was pretty big news but in now way compares to the great amount of decline and economic hardship that was a cause of the Great Depression and all the stock markets that crashed. The Great Depression is the biggest decline in stocks and I think is hard to beat because even with the downfalls that companies face now a days, they don't compare to the amount of people that the Great Depression left unemployed and living on the streets.

With the Dow Jones decline and the stock market prices down I will definitely consider buying more stocks in order to expand my horizons. Even though I'm doing pretty well with the one stock that I have which is Christian Dior, I'll look into what I'm interested in and if it's worth investing in!

Opportunity Costs

When economist talk about opportunity costs they mean that whatever they do such as build a corporation in a certain piece of land, they miss out on any other opportunities that they have for example building or constructing any other thing in that same land that can serve as a benefit towards them in the future. In economics opportunity costs are decisions that you make for what you most desire and the things that you are giving up for that one thing that you chose to do. An example of this is if you have a boyfriend/girlfriend. The time, money and effort you spend with him/her, you can be doing other things such as saving money for the future and hanging out with your friends having a good time. Some examples from my life can be that instead of a job I will start College Now. Instead of earning some money to save for college and other expenses, I will be getting a college education. Also, I am in the A.P. biology course first and second course. Instead of coming in third period and leaving fifth, I choose to come in first because I take that specific course and I feel that it will be better for me. =]

Types of Economic Systems

1) Traditional Economies - It's an economic system that have a strong social network as well as tools and methods. It's often connected to subsistence farming which means that you grow enough income to be stable rather than a large amount. In other countries, it's mostly replaces by command and mixed economy.

2) Centrally Planned (Command) Economy - This is an economic system where the state or government controls all of the factors and makes all the major decisions about their use and the amount of gross income they earn. The planneres decide what should be produced and command certain enterprises to produce those goods.

3) Market Economy - another economic system where the production and distribution of goods is controlled by free markets guided by a free price system rather than a planned economy where things are run by the state and/or government. In market economies different businessess decide what they want to buy produce. It has no central coordinator guiding the operations and usually goes hand in hand with self interest.

4) Mixed Economy - a mixed economy is an economic system that contains both private owned as well as state owned companies and also mixes elements like capitalism and socialism. Countries like United States, Canada, Cuba and others take part in mixed economies.

-What is the difference between communism and socialism?
Answer: The difference between communism and socialism is that in communism, the country controls all aspects of how the governed live and they have to live under the dictator's rules and regulations such as in Cuba. In socialism, a certain part of the government has control only on their economy and are responsible for the inports and exports. So communism is taking over all aspects and socialism is only economically taking over.

Plans

With the 50,000 that are going to be given to me, I am going to invest in the company Time Warner Company because it's only about 21 dollars per share and it can be a easy start for me.

Test

Test