Section 1
Concept that all resources are limited.
Scarcity
This law states that as prices go up, consumers buy less.
Law of demand
The three factors lenders look at when deciding to give you credit
character, capacity, capital
Three C’s of Credit
This is the price you pay for borrowing money, usually expressed as a percentage.
Expenses that stay the same each month, like rent or a car payment.
fixed expenses
The value of your second-best choice
Opportunity cost
This occurs when quantity demanded exceeds quantity supplied.
Shortage
This number (typically 300–850) represents your creditworthiness.
credit score
This type of interest is calculated only on the original amount borrowed.
simple interest
Expenses that can change from month to month, like groceries or entertainment.
variable expenses
Land, Labor, Capital, and ...
Entrepreneurship
The point where supply and demand meet on a graph is called this.
Equilibrium
Paying bills on time and keeping balances low helps improve this.
credit score/creditworthiness
This type of interest grows faster because it is calculated on both the principal and previously earned interest.
compound interest
The money you earn from a job or other sources.
income
The different ways in which economies determine how to use their resources
Allocation methods
Changes in income, tastes, or number of buyers are examples of these affecting demand.
(Demand) determinants
A type of credit that allows you to borrow up to a limit and repay over time.
credit card
This type of loan has an interest rate that stays the same over time.
fixed-rate loan
A plan for how you will spend and save your money.
budget
The process of defining problems, identifying criteria, weighing alternatives, and selecting the optimal choice.
Rational decision making process
or
Decision making model
If the price of a good rises and producers make more of it, this law is being demonstrated.
Supply
This type of loan is specifically used to pay for college or education expenses.
student loan
This is the original amount of money borrowed before interest is added.
principal
When your income equals your expenses, you have this type of budget.
balanced budget