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Unit Three Vocab
Economics And Personal Finance Unit Three Vocabulary
| Term | Definition |
|---|---|
| Money | A commodity accepted by general consent as a medium of economic exchange. |
| Medium Of Exchange | An intermediary instrument of system used to facilitate the sale, purchase, or trade of goods between parties. |
| Store Of Value | An asset that maintains its value, rather than depreciating. |
| Unit/Standard Of Value | An agreed-upon worth for a transaction in a country's medium of exchange. |
| Commercial Bank | A financial institution that accepts deposits, offers checking account services, makes various loans, and offers basic financial products like certificates of deposit and savings accounts to individuals and small businesses. |
| Credit Union | A financial institution that offers services like banks but is run by its members. |
| Payday Lenders | A short-term, high cost loan, generally for $500 or less, that is typically due on your next payday. |
| Title Pawn Lenders | Title loan that uses your vehicle title as collateral to secure your loan. |
| Risk | The chance that an outcome or investment's actual gains will differ from an expected outcome or return. |
| Return | The money made or lost on an investment over some period of time. |
| Savings Account | An interest-bearing deposit account held at a bank or other financial institution. |
| Certificates Of Deposit | A savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. |
| Roth IRA | An Individual Retirement Account to which you contribute after-tax dollars. |
| 401K | A retirement savings account that allows an employee to divert a portion of their salary into long-term investments. |
| 403b | A retirement plan offered by public schools and certain 501 tax-exempt organizations. |
| Stocks | A form of security that indicates the holder has proportionate ownership in the issuing corporation and is sold predominantly on stock exchanges. |
| Bonds | A debt security, similar to an IOU. |
| 529 Accounts | A state-sponsored investment plan that enables you to save money for a beneficiary and pay for education expenses. |
| Mutual Funds | A company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. |
| Diversification | The process of shifting an economy away from a single income source towards multiple sources from a growing range of sectors and markets. |
| Credit Report | A summary of how you have handled your credit accounts. |
| Credit Score | Predicts how likely you are to pay back a loan on time. |
| Revolving Credit | An agreement that permits an account holder to borrow money repeatedly up to a set dollar limit while repaying a portion of the current balance due in regular payments. |
| Installment Credit | A loan you make fixed payments toward over a set period of time. |
| Annual Percentage Rate | The yearly interest generated by a sum that's charged to borrowers or paid to investors. |
| Simple Interest | A quick and easy method of calculating the interest charge on a loan. |
| Compound Interest | The interest on savings calculated on both the initial principal and the accumulated interest from previous periods. |
| Fixed Interest Rate | An unchanging rate charged on a liability, such as a loan or mortgage. |
| Income | The amount of money, property, and other transfers of value received over a set period of time in exchange for services or products. |
| Hourly Wages | A rate paid per hour of work. |
| Salary | A fixed amount of money or compensation paid to an employee by an employer in return for work performed. |
| Dividends | The distribution of a company's earnings to its shareholders and is determined by the company's board of directors. |
| Capital Gains | The increase in a capital asset's value and is realized when the asset is sold. |
| Gross Pay | What employees earn before taxes, benefits and other payroll deductions are withheld from their wages. |
| Net Pay | The amount received by an employee. |
| FICA | A U.S. federal payroll tax. |
| Deductions | An expense that can be subtracted from a taxpayer's gross income in order to reduce the amount of income that is subject to taxation. |
| Income Taxes | A type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. |
| Sales Tax | A consumption tax imposed by the government on the sale of goods and services. |
| Property Tax | A tax levied on "real property" (land and buildings, both residential and commercial) or personal property (business equipment, inventories, and noncommercial motor vehicles). |
| Estate Tax | Is imposed on the net value of an individual's taxable estate, after any exclusions or credits, at the time of death. |
| Capital Gains Tax | The levy on the profit that an investor makes when an investment is sold. |
| Progressive Tax | One where the average tax burden increases with income. |
| Proportional Tax | A tax in which the percentage of tax taken from a person's income remains the same, regardless of how much money he or she earns. |
| Regressive Tax | One where the average tax burden decreases with income. |
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