In the above image, what information about the product is most important to the advertisement?

1. It catches a lot of dirt.

2. It cleans quickly.

3. It has bristles made out of nanotubes.

4. It’s red.

5. It’s inexpensive.

Ok, so looking at this ad, right away, the biggest thing I can see is the name, “Speedy Broom.” Also, look at the broom, it’s got speed lines rushing by after it. And finally, the very first bullet point says that it cleans floors in half the time. So before I even read the answers, I’m thinkin’ “this is a fast broom.” Then when I look and see, “it cleans quickly,” I can guess that I’ve already found my answer. But it’s always good to look at the rest.

Number one and number three are both mentioned in the ad: “Nanotube bristles catch more dirt than a conventional broom!” So, we know they’re true, but I think that all that stuff about the nano-bristles catching more dirt and not sticking to hair and dust just supports how fast the broom is. To tell you the truth, I don’t even know what a nanotube bristle is, but that doesn’t matter. It’s obvious that it’s not the main purpose. Otherwise it would be called “Nano-Bristle Broom” or have lots of dirt being swept up in the image, right?

Number four is true ’cause it is red, but that’s not really important in this ad. If it was a blue broom, the ad would still be saying the same thing.

I don’t think number five is right at all. $30 for a broom doesn’t seem very cheap. Maybe for a wild nano-broom with nano-bristles it’s inexpensive, but even so, the price is at the bottom. It is red, which makes it maybe a little important, but I just think that the speed of the broom is the obvious choice here. What do you think?

Keep studying everyone, and have a great holiday season!

For more information about the GED test and GED test preparation, visit the GED Academy at http://www.passGED.com

Socialism: Socialism is an economic system where the government controls major portions of the economy, for example health care. Notice how lately, people have been saying that pumping money into the banks means “socializing” or “nationalizing” them? Well, it’s because the government is buying parts of the banks. And if the government owns the banks, a socialist banking system… but that’s not really what’s going on. The government is not buying controlling shares, so it doesn’t really own the banks… just a piece of them. And they’re hoping to get out soon!

Capitalism: Capitalism is an economic idea, that businesses should be privately owned, and through competition and supply and demand, the best businesses will survive and the economy will thrive. That’s the basic idea for the U.S. Unfortunately, we’ve been seeing that you can’t have capitalism without any regulations… unless you’re willing to live through the big failures! That’s the question… should we just let big banks fail, because it’s all part of the capitalist system?

Communism: Communism is a tough one. Karl Marx first had the idea of communism, a society where all the economic systems would be controlled by the people. But “people” translates into “government” in real life. So, communism and socialism tend to get mixed up. In communist countries, the government is controlled by one political party, and the economy is controlled by the government. Think of it as extreme socialism… more government control. The idea is to make a society that’s more equal and better for everyone, but it doesn’t seem to work out that way, to me!

Fascism: Fascism is a political leader or party who tightly controls a government, without any checks and balances. Fascism and communism start to sound a bit alike, right? But fascism is more political and less economic. The government has control of everything, and often there’s oppression and denying people rights. A fascist government is totalitarian, often relying on a dictator. The government gets absolute power, and usually uses a strong military to enforce it! Not a good idea, if you ask me.

So, those are some important -isms to keep in mind on the GED social studies test…

For more information about the GED test and GED test preparation, visit The GED Academy at http://www.passGED.com.

I’ve been trying to figure out what’s going on, and here it is, as I understand it.

So, there’ve been lots of funny mortgage loans, that banks offered to help people buy houses. Because the banks make money off loans, they want to sell as many loans as possible, right? So, there’ve been loans with small payments, but you’re not really paying all the interest on the loan plus some principle (the original loan amount), like usual, cuz the payments are so low. So, your loan balance gets bigger instead of getting smaller, if you just pay the minimum. That’s one example.

Well, so a bunch of people who wanted houses got sold these loans. Some of them thought they’d be able to resell their house later, or get a different loan, to be able to pay off their mortgage.

Okay, well, the price of houses didn’t keep going up and up and up. Because eventually, prices start going down. That meant, people were in trouble. They thought they could refinance, but they couldn’t. Maybe their payments changed because of their mortgage. Well. That meant lots of people couldn’t make their payments–people like you, maybe.

Then, what happens?

The banks don’t get paid. After selling all those loans, now the banks aren’t getting money back. And they’ve got bad debts on the books. That means, banks are short of cash. Some of them can’t pay their debts. And others are worried about making new loans, to businesses or other banks. So, banks can’t borrow money, either. Uh-oh. Money shortage. You know how that is from your own life.

Banks started to go bankrupt. Stocks crashed. Now, the government wants to step in to try to solve the problem. The idea is, the government will buy up the bad debt. Maybe they can help people be able to pay off their mortgages and make some of the money back. Of course, there’s lots of talk about what should go into the plan, like stopping big executives from walking off with a pile of dough.

So, here’s a GED question about this big mess!

According to supply and demand, what’s the most likely reason that housing prices started to fall?

A)� There was more demand for houses than supply.

B) � There was more supply for houses than demand.

C)� Supply and demand kept changing.

D)� There was too much demand for mortgages.

E)� Supply and demand do not affect price.

Got the answer?

It’s A B. (Thanks, Marie–my typo.) Supply and demand is one of the basic ideas of economics, and here it is at work. When their are too many houses and not enough buyers for them, the prices go down. And eventually, you get to that point, you know? That’s just what happens. People keep building houses, because lots of people are buying them. But, eventually, all the people looking to buy houses have bought them… or the prices get too high… and you have more sellers than buyers. More supply than demand. That’s when prices go down.

So, I’ll be keeping an eye on what’s going on to prepare for GED social studies… I tell you, this real-world stuff is the best studying.

Good studying!

For more information about the GED test and GED test preparation, visit The GED Academy at http://www.passGED.com.

According to the theory of supply and demand (see my last post), the businesses:

1) Will want to sell less of the special sale promotions.

2) Will want to sell more of the special sale promotions.

3) Will want to sell a normal amount of the special sale promotions.

4) Are not allowed to reduce the prices below a certain point.

5) None of the above.

So, what did you answer? Here’s the fact… supply and demand says that businesses will want to sell LESS of the special sales promotions, because at a lower price, businesses don’t want to sell as many items. That’s answer 1. They want to sell MORE of the more expensive items, or at least things with more profit. So, what are the businesses doing?

Well, you notice they have a limited amount of those cheap items, right? And a limit on how many you can buy, too. That’s cuz they don’t want to sell a whole truckload of those! They want to get a bunch of people coming into their stores looking for the sale items. (Because according to supply and demand, more people will want to buy the cheaper items, right?) Then, the stores want to sell other items to the people who come in… get you to do as much of your Christmas shopping there as possible. Can you see how it works? That’s economics in action!

It’s the Christmas shopping season!!! Black Friday is what they call the day after Thanksgiving, when businesses supposedly sell enough stuff to put them “in the black,” in other words making a profit for the year.

Businesses run special sales on Black Friday to bring in more people. (Ever gone to one? They’re crazy!! Like, Mervyn’s opened at 4:00 a.m.!!)

According to the theory of supply and demand (see my last post), the businesses:

1) Will want to sell less of the special sale promotions.

2) Will want to sell more of the special sale promotions.

3) Will want to sell a normal amount of the special sale promotions.

4) Are not allowed to reduce the prices below a certain point.

5) None of the above.

What do you think? I’ll catch you next time with the answer.

http://www.investopedia.com/university/economics/economics3.asp

The Basics

• As the price goes up, demand goes down.

The cheaper something is, the more people want it. The more it costs, the less people want it. Right? If something’s only a buck, you’re more likely to buy it than if it’s 10 bucks. That’s easy. More people will buy an item if it’s cheap.

• As the price goes up, supply goes up.

The more something will sell for, the more the businesses want to sell. Right? They want to make as much money as possible. So, if something will sell for $100,000, they want to sell LOTS. (Wouldn’t you?) If it only sells for a buck… well, they just don’t care as much.

• As the price goes up, demand goes down, but supply goes up.

I’m just putting this all together… When you show the supply and demand ideas together on a graph, they go in opposite directions. As price goes up, more sellers want to sell, but fewer buyers want to buy.

The buyers want a cheap price, and the sellers want an expensive price. That’s just human nature, right? If the price is too high, there will be more sellers and less buyers, so the sellers can’t sell all their stuff. If the price is too low, there’ll be more buyers and less sellers, so the sellers will run out.

• Supply and demand meet in the middle… at “equilibrium.”

If you look at a supply and demand chart, the two lines cross in the middle. That point is called “equilibium.” Maybe because supply and demand are the same–equal. That’s the point where there are exactly the same amount of buyers and sellers at a certain price. The idea is, because of how much people value an item, the price will end up at the equilibrium point, and all the items will get sold.

Of course, real life isn’t always perfect like that. It’s oversimplified… but prices do tend to work this way. So, what do you think? Next time, I’ll come up with a practice question about supply and demand.