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Unit 1 Economic Test
| Question | Answer |
|---|---|
| Income | Money that comes in |
| Expenses | Money that is spent |
| Fixed expenses | These cannot change. You pay the same every month. |
| Variable expenses | These are regular monthly payments, but you can determine the amount paid |
| Discretionary expenses | Things you spend money on that you can do without |
| Long-term expenses | Planned expenses that come less often than once a month |
| Federal Deposit Insurance Corporation (FDIC) | Each bank is required to put money into an insurance plan to protect all depositors from theft and economic downturns |
| Standard savings account | The lowest interest rate but can be withdrawn at any time |
| Money market | Higher interest rate and allows a limited amount of chekcs to be written. You must keep a minimum balance in this account. |
| Certificates of deposit | Has high interest rate, but you must leave your money in the account for a certain time; usually at least six months. |
| Pawnshops | They buy items of value or will loan people with money with a high interest rate. They need a piece of collateral for security. If you do not pay the loan back, they keep that collateral item. |
| Loan sharks | People with poor credit usually go these people if they cannot get a loan anywhere else. There is a very high interest rate on the loan, making the loan last longer than it needs to be. |
| Check-cashing centers | Will give you a loan or cash advance by using your next paycheck as security. They usually charge a very high interest rate. |
| Debt consolidators | This place will combine all your debt payments into one by loaning you enough money to pay off your debts. This way you have one monthly payment. |
| Principle | This is the amount of money that is borrowed. |
| Interest | This is the fee you pay for the use of your lenders money |
| Credit | Barrowing, charging, or a loan. This is the use of someone else's money. |
| Annual Percent Rate (APR) | This is the interest rate that covers a loan for one year - the lower the rate the less cost to the barrower. |
| Mortgage loan | A loan to buy a house. This means your monthly fixed payment includes part of the principle plus the interest. |
| Revolving credit card | A type of credit card that allows you to carry a balance from month to month. |
| Bankruptcy | When your debts exceed your assets so much you can no longer pay your bills. |
| Producers | People who make goods and/or services |
| Consumers | People that buy goods and services that are produced |
| Expansion | When the economy is growing |
| Inflation | When the prices of goods and services are rising |
| Recession | A slowdown of economy activity and growth for an extended period of time |
| Depression | Similar to recession only way worse. A deep decline in the economy |
| Scarcity | Resources of time and money are limited. Needs and desires for goods and services are unlimited. Thus, there will be times when an item is unavailable. |
| Capital | Factories and the equipment the business owns. |
| Labor | The work done by employees. |
| Entrepeneurship | The ability to start a business and manage the resources, capital, and labor. |
| Gross Domestic Product | The value of goods and services that is provided for fiscal year in that country: 1. output of products 2. money invested and spending 3. income |
| Inflation | The increase of prices (goods). If healthy, it stays steady and does not increase. A healthy inflation rate is <2% |
| Unemployment rates | The percent of people in the U.S who do not have current jobs and are still looking for work (currently at 3% compared to 8.5% last year) A healthy rate is between 3 & 5 % |
| Retail sales | The sales from different departments in the U.S. such as food services and other retails stores |
| Home sales | The sales of single-family homes throughout the U.S. during a month (dropped 2.2% this month) |
| Interest rates | Percentage paid for money loaned (4 - 6 % is healthy- currently at 6.4% for mortgages and between 7.75% and 18% for bank loans) |
| Consumer price index | Date collected on a person’s money spent compared to their income. (income increased by .19% while spending increased by .2.59% October 2024) |
| Simple interest formula | P x I x T = amount earned + P = Total money in account P = principal I = interest rate T = time in account |
| Property tax | Taxes imposed on real estate by local governments based on the property's assessed value. |
| Excise tax | A tax on specific goods like alcohol, tobacco, and fuel, typically included in the price. |
| Income tax | The amount of income that is subject to tax such as wages, salaries, bonuses, dividends, rental income, interest, and capital gains. |
| Commercial banks | full-service banks because they offer complete lending, checking, and savings services |
| Savings and Loan Bank (S&L) | financial institution that specializes in real estate financing and home lending |
| Credit Union | a nonprofit-making money cooperative whose members can borrow from pooled deposits at low interest rates. |
| What are the four types of taxes people pay in the U.S.? | sales, property, excise, & income |
| Essay: Pick three economic indicators- define them and explain what it would like if it was healthy | Gross Domestic Product (GPD)- value in dollars of all the finished goods and services produced in a year for that country. Inflation- represents the ongoing increase of prices: if healthy increase is steady from year-to-year. |
| Essay: Pick three economic indicators- define them and explain what it would like if it was healthy | Unemployment rate- The percent of employable people who don't currently have jobs and are looking for work. Healthy is 4-5%. Personal income- The amount of $ people have to spend and can be spent: A steady increase form year-to-year is healthy. |
| Essay: Pick three economic indicators- define them and explain what it would like if it was healthy | Consumer confidence- The degree of confidence, or trust, people feel about businesses, products or the economy in general: 8 out of 10 is a good rating. Interest rates- The percent paid for an amount of money barrowed: Healthy is 4-6% |
| Consumer confidence | the degree of confidence, or trust, that people feel in a business, product, or economy in general |
| Sales Tax | The percentage of the sale price that is added as a tax. |
| College loans | loans that help people pay for their college education |
Created by:
akellenberger22
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