Basic
What is Economics?
Economics is the study of how individuals. business, governments and societies make choices about how to allocate limited resources to satisfy unlimited wants and needs
The term that denotes the amount borrowed or the amount still owed on a loan, OR the original amount invested.
Principal
Define ATM
Automated Teller Machine
This includes all the records of loans you have taken out and paid back over your life.
Credit history
What is 401K plan?
A plan is an employers-sponsored retirement savings plan that allows employees to save and invest for retirement.
What is a Financial Plan?
United States federal tax form issued by employers stating how much an employee was paid in a year. It is submitted to the IRS along with your tax return.
W-2
These two types of accounts, maintained by commercial banks and credit unions, may or may not have associated fees, pay interest, or require minimum balances. Deposits and withdrawals are made directly from such accounts, often via bank tellers and ATMs.
Checking and savings accounts
Define Payroll Tax
Taxes withheld from paycheck for Social Security and Medicare.
This number is used by lenders to determine how much they charge you for interest on loans.
Credit score
This is the income received prior to taxes and deductions.
Gross pay
What is Liability?
A financial obligation or debt owed by adn individual or business, such as loans or credit card balances.
The Federal Income Contributions Act (FICA) requires that you pay these two "payroll taxes" (for retirement and healthcare)
Social Security and Medicare taxes
What is the 50-30-20 rule?
50% goes to needs. 30% goes to wants. 20% goes to savings
Define Commission
Income based on a percentage of sales.
What is GDP?
Gross Domestic Product- all goods and services produced within a country over a period of time
These types of expenses remain unchanged from period to period. Examples include mortgage or rent, insurance, and, often, utilities.
Fixed expenses
What is a budget?
A financial plans that estimates income and expenses over a certain period.
This is maintained, either electronically or by hand, to account for deposits, withdrawals and other line items.
Bank statement
Free Point
Free Point
Define Discretionary Spending
Non-essential purchases like entertainment.
Property that is used by a lender to secure a loan (the bank takes the property if you don't repay the loan).
Collateral
These types of expenses fluctuate or change from period to period. Examples include personal entertainment or travel costs, and other discretionary items.
Variable expenses
What is the law of demand?
The law of demand states that as the price of good or service decreases the quantity demand increases.
What’s the term for too much supply?
Surplus
What is a Monopoly?.
A monopoly occurs when a single company has exclusive control over a particular product
Define Bank Reconciliation
Matching bank records to personal records.
In general, the longer the term of the loan, the higher this is.
Interest rate
Type of interest that grows not only on the principal but also on all accumulated interest over time.
Compound interest
What is the law of Supply
The law of supply states that as the price of goods and services increases the quantity supplied increases.
What is the central bank of the US?
The Federal Reserve
This saving option you can get at a bank for a period of 3 months, 6 months, or 1 to 5 years. The bank pays a fixed amount of interest, on a fixed amount of money, for a fixed amount of time. A penalty is charged if the money is withdrawn before maturity.
Certificate of deposit
Define Opportunity Cost
The value of the next best alternative given up.
This interest rate, which factors in borrowing fees, must be divulged by lenders so that you may more easily compare rates.
Annual percentage rate (APR)?
This government agency guarantees your deposits in a bank up to $250,000.
FDIC
What is the role of competition in the market?
Competition encourages innovation, lower prices, and improves quality, benefiting consumers.