Unit 1: Decision Making
A selection of an option from a set of possibilities
Choice
The amount of income earned prior to deductions
Gross Pay
Certificate of Deposit
Excess money than needed for a budget category
Surplus
This person makes the decision whether to approve an applicant for credit
Creditor
The next best alternative given up when a choice is made.
Opportunity Cost
Tax dollars withheld from paychecks and used to finance the national budget that pays for the military, Congress, National Parks
Federal taxes
This is a high yield account that you can write checks from
Money Market
an expense that may or may not occur each month and varies in cost
Discretionary
A number that rates your trustworthiness in terms of borrowing and paying back money.
Credit Score
This is a type of goal that can be reached within a year
Short term
A form you complete when first employed that indicates your federal withholding.
W-4
The two basic functions are taking deposits and issuing loans
Financial institutions
An estimate of income and expenses for a given period of time
Budget
Something you have of value that guarantees that you will pay back a loan.
Collateral
This is how all goals should be set in order to make sure that they are met
SMART
Federal retirement and medical program
FICA
This is an agency that protects most accounts of banks, up to a certain amount
FDIC
you need this in the event of a major income change
Emergency Fund
The factor that makes up the highest percentage of your credit score
Payment history
This is used in economic decision making
Handy Dandy Guide
U.S. Taxes are an example of this type of tax system
Progressive
This concept states that saving money now is worth more than saving the same amount in the future
Time Value of Money
This occurs when there is not enough money to cover an expense
Deficit
The higher your credit score, the lower your ______.
APR