Macroeconomic Terms
A general, prolonged rise in the prices of goods and services. (It doesn’t seem to go in the opposite direction)
Inflation
the total amount of regular pay, overtime pay and any other reimbursements you receive during a pay period.
Gross Pay
Which document/form is this?
The purpose is to inform the employer of how much the employee wishes to pay in taxes, relative to the standard deduction.
W-4
Vocab: A core economic concept that represents the value of what you give up when you choose one option over another. It demonstrates the “trade-offs” required by scarcity.
Opportunity Cost
Roth IRA
Stock Market
401k
Are all examples of what?
Ways to invest
A tax by a government on goods and services imported into a country, often used to protect domestic industry or generate revenue
Tariffs
the amount of your pay that you receive AFTER your employer takes out withholdings and deductions.
Net Pay
Which document/form is this?
The purpose is to inform the employee and the government of the total taxes that were paid by the employee during the previous year of employment.
W-2
Vocab: Costs that can change in amount from month to month because they are based on personal behavior or usage
Variable Expense
The following are examples of...
401k
Insurance
Transportation (if you can get your CTA or Metra fare deducted, it saves $$$)
Health Savings Account
Deductions (not mandatory) from a paycheck
State when the quantity supplied equals the quantity demanded, resulting in a stable market price and quantity.
Equilibrium Point
mandatory earnings deducted from your pay - BEFORE you get paid.
Withholdings
Which of the following gets the biggest tax break?
-single/ married filing separately
-married filing jointly
-head of household
Vocab: Costs that remain the same every month because they are usually tied to a contract or a membership.
Fixed Expense
If you have this type of credit score when purchasing a vehicle, your interest rates on a loan will be higher...
What is a low (poor or fair) credit score
A statistical estimate of the level of prices of goods and services bought by households
CPI (Consumer Price Index)
Voluntary earnings taken from paycheck to fund “perks”
Deductions
William A Pay's tax withheld was $5,000 but his total tax was $3,525. Is William getting a refund or does he owe money?
Refund
How might having monthly payments towards a loan or bills benefit you in the long run?
It increases your credit score (credit mixing)
True or False: All 401ks and Roth IRA plans are the same
False: programs differ depending on employer
The total dollar value of ALL goods and services produced in a country during the year.
GDP (Gross Domestic Product)
The following are all examples of what
Federal Income Tax
Social Security (FICA)
Medicare
State Tax
Local Tax (not in Chicago)
Child Support (20% for 1 child, 28% for 2, etc.)
Where would you find the standard deduction on the 1040?
On the lefthand side (2024= between lines 4-15) (2025= between lines 12-23)
Essential services that are provided for everyone and that everyone pays for
Utilities
What is a common reason lenders use credit scores when determining interest rates?
To evaluate the borrower's creditworthiness