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39 Cards in this Set

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economics

the study of production, distribution and consumption of goods and services

inflation

increase in the general price level of goods and services causing a decrease in purchasing power

deflation

decrease in the general price level of goods and services typically caused by reduction in the supply of money

economies of scale

increase in the efficiency of production or services offered as the number increases

supply

total amount of a good or service that is produced at a specific price and available to a market

demand

total amount of a good or service that consumers would purchase consume at a specific price in the market

equilibrium price

point at which quantity demanded equals the quantity supplied

wage

payment of money for labor or service on a hourly basis

salary

payment of money for labor or service on an annual basis

payroll witholding

amount held from your gross income to pay for specific taxes insurances and retirement contributions

disposable income

amount remaining to spend or save after all financial obligations are satisfied

debts

an obligation for funds borrowed

budgeting

process of managing income an expenses to accomplish a specific purpose

need

good or service that represents life necessity

want

good or service that are option and not life necessity

expenses

the cost required in exchange for some benefit or service

saving

regular budgeted amounts held for the specific purpose of paying liabilities and expenses if income is interrupted

investment

exchange of money for the purpose of a future gain

diversification

strategic allocation of investments to manage risk

portfolio

group of financial vehicles held by an individual

stocks

investment offering ownership in a company and claim on a portion of their assets

bonds

investment offered as a debt to a company with defined terms and maturity date

mutual fund

singular investment comprised of a pool of many different investments operated by a money manager

defined contribution plan

retirement plan in which an employer offers a specific amount paid into your retirement account annually

defined benefit plan

retirement in which an employer promises specific benefits based on years of service completed

401k

retirement plan that allows deferred tax contributions. tax deferred until withdrawals are made from the account

contribution

amount of a deposit into a retirement account

premium

cost of an insurance policy

deductible

amount of money to be paid b a person before insurance benefits are assessed

philanthropy

investment in society to improve people and circumstances that could not create the investment themselves

appreciation

increase in value over time

depreciation

decrease in value over time

interest rate

percentage of a sum of money charged or paid for its use

cost benefit analysis

process of weighing total costs against expected benefits to determine the best option available

opportunity cost

difference in value and benefit between competing options

time value of money

financial approach to calculate past, current and future values

debit card

electronic bank card that allows immediate access to normal accounts like checking and savings

credit card

electronic bank card that allows immediate creation of debt based on transactions charged to the account

e-banking

ability to manage bank accounts through the internet without visiting a banking branch or location