Economics:Skills For Consumer Success
Terms
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- job
- specific task or stint of work
- functional resume
- when you list a brief summary of your experience and specify skills and abilities
- transferable skills
- common to a number of jobs and can be adapted to a particular employer's need
- self management skills
- personality traits that help an employer decide if your temperament suits a particular job
- job content skills
- related to job-specific tools and tasks.
- biweekly paycheck
- paid every two weeks for a total of 26 paychecks per year
- semimonthly
- twice a month, 24/yr
- monthly
- once a month 12/yr
- wage
- payment for labor or services performed
- hourly wage
- required to work certain amount of hrs/week
- overtime
- 1.5 times regular hourly pay usually
- salary
- fixed rate of pay for labor or services
- minimum wage
- lowest hourly wage that can be paid to an employee
- tips
- less than minimum wage, but also benefits of tips
- commission
- fee for service
- piecework rate
- you earn a set amount for each piece produced or for each piece produced that exceeds expected level of production
- deductions
- money taken out of a person's paycheck
- payroll taxes
- deducted for federal state, and social security taxes
- gross pay
- salary or wages received before taxes and other deductions are taken out
- net pay
- amount of money and employee takes home after deductions
- paycheck
- the part you deposit in an account
- paycheck stub
- record of gross pay and deductions
- exempt
- meaning no taxes will be withheld from your pay
- Form W-2
- A wage and tax statement, provides record of wages earned and total tax deductions
- income taxes
- taxes on wages, salary, interest, dividents, tips, etc required by US
- tax refund
- amount returned by govt. because a taxpayer had paid more than owed
- 3 main types of financial institutions offering checking accounts
- commercial banks, savings and loan associations, and credit unions
- credit union
- nonprofit organization with membership limited to a particular group
- share draft accounts
- interest-bearing checking accounts
- charter
- a document that gives an institution authority to operate.
- teller
- person at the counter of a bank
- service charge
- fee that the financial institution charges for checking account services
- blank endorsement
- when you cash or deposit a check made out to you, and u endorse the check by signing your name on the back
- restrictive endorsement
- to deposit a check and receive no cash
- endorsement in full
- when you receive a check, but pay someone else with it (3rd party check)
- stale check
- keeping a check longer than 6 months
- outstanding checks
- checks written but not recived by a bank
- reconciliation statement
- balances your check stub record or check register with the bank's statement
- simple interest
- amount of money you earn on the money you deposit
- principal
- amount owed
- time
- number of years or months the money is deposited
- rate of interest
- the amount paid on each dollar saved during a time period
- interest
- the amount paid for the use of borrowed money
- yield
- the amount your money will earn in interest
- liquidity
- money deposited into savings that can be easily and quickly turned into cash
- low minimum balance
- small deposit required to open some savings accounts.
- safety of amount deposited
- most banks offer insurance to cover up to $100,000 per account
- certificate of depoisit (CD)
- an account with a high rate of interest but with many restrictions, including penalties for early withdrawal
- money market depoisit accounts (MMDA's)
- an account with a variable rate of interest that may be higher or lower than the other types of accounts
- Electronic fund transfers (EFT)
- eliminate costly and time consuming procedures of handling, and processing checks, deposit slips, etc. Most common is ATM
- point-of-sale transfers (POS)
- type of EFT, you can pay a retailer or seller by using a debit card instead of check or currency
- certified check
- personal check you write which the bank certifies to guarantee its payment
- cashier's check
- often used by financial institutions to pay their own bills
- traveler's checks
- bought from agency/bank in certain amounts for traveling
- money order
- also called a register check or personal money order, serves same purpose of cashier's check
- safe-deposit boxes
- containers inside the vaults of banks that you can rent, provede protection for valuables
- credit worthiness
- determined by three factors, character, capacity, and capital
- credit standing/rating
- indications of your ability to pay for goods or services, established over time
- credit bureaus
- provide credit information about you, and your credit history
- Consumer Credit Reporting Reform Act of '96
- makes it easier for you to correct mistakes on credit report
- equal credit opportunity act of '75
- outlawed sex discrimination and discrimination because of marital status in the granting of credit
- Fair debt collections practices act of '77
- designed to stop abuisve practices used by some debt collectors.
- five main areas of credit scoring
- payment history, current debt, length of credit history, new accounts and inquiries, kind of credit
- personal/shor-term/intermediate-term loans
- loans that are for relatively small amounts
- long-term loans
- loans for larger purchases
- savings and loan associations
- specialize in loans for buying real estate
- life insurance companies
- may allow a policyholder to borrow against some types of insurance policies
- consumer finance companies
- often lend to consumers who do not have an established credit standing, higher rate of interest
- credit unions
- orgainizations that grant small loans to their members
- pawnbrokers
- charge extremely high interest rates, you must turn over personal property
- loan sharks
- unlicensed lenders who operate openly in states without usury laws
- usury laws
- limit the rate of interst a lender may charge
- single-payment loan
- lump sum loan to be repaid at the end of a certain period of tiime
- installment loan
- repaid with interest in a series of payments
- promissory note
- written promise to repay borrowed money at a certain time
- secured loan
- backed by something of value pleged to insure payment of the loan
- collateral
- the property used as a security for a loan
- finance charge
- the total dollar amount you pay to use credit; can be more than interest
- alimony
- an allowance maid to your former spouse for support after a legal separation
- assets
- property that you own
- bankrupt
- financial situation in which your debts are greater than the total value of your assets
- cash value
- the amount paid to you if you or the insurance company cancel the policy
- co-applicant/joing applicant/cosigner
- someone who signs a loan with you and promises to repay the debt if you do not repay it
- co-owners
- joint ownership; two or more people share ownership rights
- creditor
- someone to whom you owe money
- credit references
- people who will cecommend that you are a good credit risk
- debt
- money owed
- debt balance
- amount still owed on a debt
- default
- failure to fulfill the terms of the loan agreement
- dependents
- those who rely on you for financial support
- liabilities
- financial obligations, such as a car loan
- mortgage
- legal contract giving the lender ownership of real estate in case you do not repay a loan
- mortgage holder
- person or institution to whom you make mortgage payments
- proceeds
- the amount of money a borrower or policy holder receives
- real estate
- land and anything attatched to it
- repossess, reclaim
- to take back what was sold on an installment plan if payments are not made as agreed
- securities
- another name for stocks and bonds
- unsatisfied judgement
- deliquent debt; payment that is over due
- rule of 78's
- method of calculating interest
- defalut payment clause
- explains a late mayment charge or penalty
- deficiency clause
- one in which a creditor can repossess or take back, and resell goods
- security interest
- an agreement where the creditor keeps the ownership of goods until you complete all the payments
- wage assignment/garnishment
- clause that allows a lender to collect a portion of your wages if you have defaulted on a loan
- disclaimer
- agreement between the creditor and you that unwritten promises will not be recognized by the court in hte case of a disagreement
- line of credit
- refers to maximum amount you can charge at any one time
- budget
- plan for spending and saving money
- fixed expenses
- bills that you must pay every month or during certain months throughout the year
- fee-for service plan
- you pay for the services as you use them
- benefits summary
- summary of medical and other services covered
- indemnity plan
- type of policy where the insurance company sends you a percentage of the bill
- co-insurance
- the portion of covered medical expenses that you pay
- deductible
- the dollar amount you must pay each year before the insurance company will pay any portion of your medical expenses
- policyholder
- person who purchases the policy
- policy
- an insurance contracty
- insurance agent/broker
- person who sells insurance
- premium
- amount paid for insurance
- coverage
- items or circumstances for which the insured is promised payment
- claims
- formal requests for payment of amount or a percentage of the financial loss
- providers
- doctors, hospitals, clinics, or other health care services
- benefits
- payment for financial loss
- managed care plan
- prepaid care, rather than pay a deductible, u pay a premium which pays for your care in advanced
- copay
- set amount for an office visit or prescription
- exclusions
- services they will not cover
- concealment
- unlawful withholding of information
- preexisting conditions
- medical conditions that are treated or diagnosed before you buy a policy
- disability income insurance
- pays a portion of your salary if you are unable to work because of illness or injury
- worker's compensation
- health insurance provided by the state government for employees who suffer injuries or illness as a result of working conditions
- term insurance policy
- provides protection only; insures your life for a specified number of years
- cash-value policy
- combines protection and savings
- beneficiary
- person named in the policy who receives the amount stated in the policy
- convertible term policy
- can be changed into a cash-value policy
- level term policies
- premiums and dollar coverage remain hte same the entire time the policy is in effect
- decreasing term policy
- your premiums rmain the same but the dollar coverage of the policy gets smaller each year
- face value
- dollar amount of insurance coverage on a policy
- limited-payment life/paid-up whole life
- the insurance protections lasts for life, but the premium payments stop at a certain age
- modified whole life
- typically a cash value policin in which the premiums are lower in the early years of payment on the policy and increase later
- endowment plan
- another form of cash-value life insurance, which protects you for a stated number of years
- universal life insurance
- combination of term and cash-value insurance
- retirement income
- the amount of benefits a retiree receives, full benefits start at 65...now 67
- 401(k)
- retirement plan where contributions are made through your employer
- tax deferred
- you do not pay taxes on the money when you earn it you pay taxes on the money when it is withdrawan from the IRA fund (IRA=Individual Retirement Accounts)
- Roth IRA
- different from IRA; Roth IRA money is not tax deferred
- risks
- requires a higher payment of insurance ie. age, gender, marital status, etc (known as driver classification)
- traffic violations
- include speeding, reckless driving, and accidents, not parking tickets though
- principal operators
- main operators of vehicles
- rating territory
- city, or rural area that affects the price of premiums on auto insurance
- driving record
- affects rates, offical list of recent traffic violations
- toatled
- the cost to fix the damaged car exceeds the car's worth
- claims history
- affects rates; the history of claims made to fix damage
- limits of protection
- amount of coverage
- Liability
- the damage you may be held legally responsible for as a result of an accident in which you are at fault
- property damage liability insurance
- company pays for the cost of the damage to the other person's car or property, and also covers bodily injury costs up the the set amount
- single-limit basis
- one amount that the company will pay for any one accident
- split-limit basis
- separate limits are set for different categories
- general liability
- covers damage you cause to other people's property and injuries to accident victims
- collision insurance
- covers damages to your car only
- comprehensive physical damage coverage
- protects you against possible loss when the car is damaged in any way through no fault of your own, or when car is stolen
- medical payment coverage
- pays accident-related medical expenses incurred for one year after an accident
- uninsured motorists protection and underinsured motorist protection
- insures you against hit-and-run drivers and drivers with little or no insurance.
- no-fault insurance
- insurance company pays for bodily injuries to you and your passengers, no matter who caused the accident
- wage-loss coverage
- reimburses you for income lost while you are recovering from auto injury
- substitute-service coverage
- coverage for services that you cannot perform for yourself because of an auto-related injury
- property protection
- pays for losses to the house and other property
- real property
- includes physical structures that are attatched to the land, such as home, garage, and fences
- floater policy
- "floats" wherever the property goes...ie. necklace stolen in france is covered
- umbrella policies
- cover more than just bodily injury and property damage
- depreciation
- decrease in value of property as it becomes older and starts to wear out
- lemon
- car or any other product that is defective
- warranty
- promise by a manufacturer or dealer that a product is of certain quality and the defective parts will be replaced within a certain period of time
- late model
- used car that is only a few years old
- mulroney label
- list of standard equipment in the vehicle
- invoice price
- price dealer pays
- sticker price
- price you pay
- margin
- the amount you negotiate with the dealer between invoice and sticker price
- gap protection
- pays the difference between the value of your toatled car and the amount left on your loan or lease
- balloon payment
- the difference between what you have paid on the car and the amount of depreciation
- closed-end lease
- rate of depreciation is guaranteed before the lease by a bank or finance company
- tenants
- the people who pay rent to live in the apartment building
- lease
- written contract allowing use of the owner's property for a specified time period
- equity
- the difference between the value of your home and the amount you owe
- down payment
- the amount of money put down at time of purchase
- morgage
- loan wehre the amount borrowed is repaid to the lender with interest
- real estate mortgage
- contract between the borrower and lender for purpose of buying property
- mortgage redemption insurance
- form of life insurance whereby the balance of the loan is paid by the insurance company if the borrower should die before the loan is repaid
- property taxes
- the seller may be entitled to a refund for a portion of the year for which property taxes were paid
- attorney's fees
- for preparing and checking legal documents of the sale and the mortgage
- loan origination fee or points
- some lenders charge fees or commissions for granting the loan
- title
- legal right to own property
- recording fee
- for the deed to the property
- deed
- written evidence of the ownership of a piece of property
- appraisal fee
- charge for examining and determining the value of the property
- title insurance
- policy that protects the lender's interest in the property against the claims of others if the claims were not discovered by the title search or examination
- counteroffer
- price above your offer but lower than the original price
- earnest money
- proves you're serious about buying the home, later subtracted from selling price
- escrow agent
- third neutral party
- scams
- fraudulent or deceptive schemes
- contract
- legal agreement between two or more people that establishes legal obligation
- competent
- capable of understanding the terms of the contract
- consideration
- payment for the product or service described in the contract
- bill of sale
- type of written contract, includes purchases and signature of buyer and seller
- full warranty
- includes repair within reasonable time, full replacement or refund
- limited warranty
- coverage for parts but not labor, partial refunds, etc
- return
- percentage increase of the initial investment
- dividend
- regular payment made by a company to its owners from the profits the company makes
- corporation
- business owned by many people
- capital gain
- selling stock for more than you paid for it
- blue chip stocks
- stocks of corporations that have a reputatuon for financial stability, superior management, and a long record of growth and earnings
- discount brokers
- buy and sell stocks for customers for low commissions without giving investment advice
- exchanges
- where stocks are traded
- round lot
- shares of stocks in hundreds
- odd lot
- purchase of stocks less than a hundred shares
- preferred stock
- buyers are promised a fixed dividend, no voting rights
- common stock
- buyers have right to vote on important company issues
- bond
- written proof of an obligation to pay a certain amount of money, with interst, at a specified date in the future
- treasury bills
- short-term securities issued with maturities of a certain number of weeks
- treasury notes
- have a maturity of at least one year but less than ten years from date of issue
- treasury bonds
- have maturity of atleast ten years
- municipal bond
- bonds issued by states, counties, cities, and other govt. bodies
- corporate bonds
- bonds issued by corporations
- strike price
- a certain price that u buy or sell stock
- investment clubs
- consists of a small group organized to study stocks and invest members' money
- economics
- the study of how goods and services get produced and how they are distributed
- scarcity
- we do not have and cannot have enough wealth or resources to satisfy our every desire
- opportunity cost
- the things we give up when we make certain choices
- needs
- basics such as food, clothing, shelter, etc
- wants
- goods or services not necessary but desired
- microeconomics
- deals with economic topics and economic deisions from an individual's or small business perspective, which includes individual companies and small groups of consumers
- macroeconomics
- study of the economy as a whole (inflation, govt. spending, unemployment, interest rates, taxation levels, etc)
- equilibrium price
- price at which quantity demanded
- equilibrium quantity
- when the quantity demanded is equal to the quantity supplied