EPF Final Exam Review

Debit Card

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder

Emergency Fund

A banking account that you can access quickly to pay for unexpected expenses or emergencies

Zero-Based Budget

A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero

Warranty

A company's or a store's written agreement to repair a product or refund your money if the product doesn't function properly

Lease

A contract granting use or occupation of property during a specified time for a specified payment

Mortgage Fraud

A crime in which the intent is to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have not been obtained had the lender or borrower known the truth.

Identity Theft

A crime that involves someone pretending to be another person in order to steal money or obtain benefits

401K

A defined contribution plan that automatically takes out money from an employee's paycheck before income taxes and invests it in mutual funds for purposes of retirement savings

Cryptocurrencies

A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

FDA (Food and Drug Administration)

A division of USDHHS responsible for regulating food and drug products sold to the public

Living Will

A document that indicates what medical intervention an individual wants if he or she becomes incapable of expressing those wishes.

Medicaid

A federal and state assistance program that pays for health care services for people who cannot afford them.

Social Security

A federal insurance program that provides benefits to retired people and those who are unemployed or disabled.

Fair Credit Reporting Act

A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used.

Medicare

A federal program of health insurance for persons 65 years of age and older

W-4

A federal tax form filled out by an employee to indicate the amount that should be withheld from his/her paycheck for taxes.

Grant

A financial award given by a government agency to a private individual or group in order to carry out a specific task

Salary

A fixed amount of money paid to an employee for each pay period.

Co-Pay

A fixed fee that an individual pays for specific medical services, like a visit to the doctor's office.

Commerical Bank

A for-profit institution that offers a full range of financial services, including checking, savings, and lending

Scholarship

A form of financial aid that does not need to be repaid; usually awarded on the basis of academic, athletic or other achievements

European Union (EU)

A free trade zone encompassing 27 European countries

Ponzi Scheme

A investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors

Gig Economy

A labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

Last Will and Testament

A legal document that gives explicit directions on how to divide a person's financial assets once he or she dies.

Monopoly

A market in which there are many buyers but only one seller.

Oligopoly

A market structure in which a few large firms dominate a market

Adjustable Rate Mortgage (ARM)

A mortgage with an interest rate that increases or decreases during the life of the loan

Fixed Rate Mortgage (FRM)

A mortgage with an interest rate that remains the same over the life of the mortgage regardless of market conditions.

Credit Union

A nonprofit service cooperative that accepts deposits, makes loans, and provides other financial services

BBB (Better Business Bureau)

A nonprofit, business-sponsored agency with local offices dedicated to educating consumers, helping to resolve disputes, and promoting honest business practices

Apprentice

A person who is learning a trade from a skilled employer, having agreed to work for a fixed period at low wages.

Consumer

A person who purchases goods and services for personal use

Budget

A plan for making and spending money

Insurance

A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.

Credit Bureau

A private firm that maintains consumer credit data files and provides credit information to authorized users for a fee

Business Cycle

Alternating periods of economic expansion and economic recession

Net Pay

Amount of income left after taxes and deductions have been taken out.

Gross Pay

Amount of salary or wages earned for a certain period of time before deductions are withheld.

Deductible

Amount you must pay before you begin receiving any benefits from your insurance company

Premium

Amount you pay monthly, quarterly, semiannually or annually to purchase different types of insurance

Savings Account

An account at a depository institution that is designed to hold money not spent on current consumption

Checking Account

An account that allows quick access to funds for transactions

Endorsement

An act of giving one's public approval or support to someone or something

Incentives

An action or reward that motivates one to act a certain way

USDA (US Department of Agriculture)

An agency that monitors the safety and quality of poultry, eggs, and meat products

Tax Return

An annual report to the IRS summarizing total income, deductions, and the taxes withheld by employers

Phishing

An attack that sends an email or displays a Web announcement to numerous people that falsely claims to be from a legitimate enterprise in an attempt to trick the user into surrendering private information

Command Economy

An economic system in which the government controls a country's economy.

Mixed Economy

An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion.

Traditional Economy

An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.

Variable Expense

An expense that changes from period to period, such as food or gasoline costs.

Pyramid Scheme

An illicit business model where profits are based on the investor's ability to recruit other individuals who are enrolled to make payments to their recruiters. Generally, neither a product or service is delivered.

Home Equity

The value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments. This value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates.

Payday Lenders

Companies that make small short-term, high-interest loans to tide a person over "until payday"

Market Equilibrium

Condition of price stability where the quantity demanded equals the quantity supplied

Opportunity Cost

Cost of the next best alternative use of money, time, or resources when one choice is made rather than another

Market Economy

Economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

Trendsetting

Establishing or influencing a new trend or fashion.

Flattery

Excessive or insincere praise

Fixed Expense

Expenses which stay basically the same from month to month, such as housing and transportation.

Overdraft Fees

Fees incurred when a customer withdraws more money from an account than what is available in the account.

FAFSA

Free Application for Federal Student Aid; determines how much financial aid a student may receive.

GED

General equivalency diploma; certificate considered equivalent to a high school diploma, earned by passing a test

Complementary Goods

Goods that are commonly used with other goods

Substitutes

Goods used in place of one another

Tax Fraud

Occurs when an individual or business entity willfully and intentionally falsifies information on a tax return in order to limit the amount of tax liability.

Beneficiary

One who benefits from something; a person who is left money or other property in a will or the like

Cost of Living Adjustment (COLA)

Pay adjustment given to eligible employees regardless of performance or organizational profitability; usually linked to inflation.

Interest Rate

Percentage paid to a lender for the use of borrowed money (in debt); percentage earned on invested principal (in investing)

FTC (Federal Trade Commission)

Prevents the unfair, false, or deceptive advertising of consumer products and services

Roth IRA

Private retirement plan that taxes income before it is saved, but which does not tax interest on that income when funds are used upon retirement

Debt Collection

Process of aggressively pursing payments of debts owed by individuals or businesses

Fair Debt Collection Practices Act

Prohibits unfair, abusive, and deception methods of collecting debt

CPSC (Consumer Product Safety Commission)

Protects consumers against the making and sale of dangerous toys, games, appliances, etc.

Patriotic Advertisements

These ads show how one can support their country while they use their product or service.

Gramm-Leach-Bliley Act of 1999

Requires financial institutions - companies that offer consumers financial products or services like loans, financial or investment advice, or insurance - to explain their information-sharing practices to their customers and to safeguard sensitive data.

403b

Retirement plan found in nonprofit organizations, such as churches, hospitals, and schools.

Elder Fraud

Taking advantage of older people and unfairly benefiting from their monetary resources.

Trade-Off

The act of giving up one benefit in order to gain another, greater benefit

Bandwagon Appeal

The argument that since something is popular or everybody is doing it, so should you.

Cost of Living

The average cost of basic necessities, such as housing and food

Expenses

The costs of operating a business

Escrow

The depositing of money, legal documents, and instructions with a third party to be held until the conditions of a contract are fulfilled

Balance of Trade

The difference between a country's total exports and total imports

Productivity

The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.

Product Recall

The removal from the marketplace of a product that is defective or hazardous to consumers.

Macroeconomics

The study of economy-wide phenomena, including inflation, unemployment, and economic growth

Microeconomics

The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.

Economics

The study of how people seek to satisfy their needs and wants by making choices

Product Placement

A public relations strategy that involves getting a product, service, or company name to appear in a movie, television show, radio program, magazine, newspaper, video game, video or audio clip, book, or commercial for another product; on the Internet; or at special events

Credit Score

A rating used by credit reporting companies to help lenders decide whether and/or how much credit can be extended to a borrower.

Pension

A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.

Credit Report

A report on a person's creditworthiness that includes identifying information, credit cards, late payments, bankruptcies, and savings balances

Deceptive Advertising

A representation, omission, act, or practice in an advertisement that is likely to mislead consumers acting reasonably under the circumstances

Product Review

A review of a product by someone with relevant and specialized knowledge.

Influencer Marketing

A series of personalized marketing techniques directed at individuals or groups who have the credibility and capability to drive positive word of mouth in a broader and salient segment of the population

Credit Card

A small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit.

W-2

A statement of an individual's annual wages and taxes provided by an employer that must be included with the employee's federal, state, and city income tax returns.

Security Deposit

A sum of money usually equal to one month's rent, held by the landlord to cover any damage to the apartment caused by a tenant.

Spoofing

A technique intruders use to make their network or internet transmission appear legitimate to a victim computer or network

NAFTA

A trade agreement between Canada, the United States and Mexico that encourages free trade between these North American countries.

Trade School

A type of higher learning school that focuses on job skill training for specific career fields rather than academics in liberal arts

Money Market Account

A type of savings account that pays a higher interest rate because the financial institution invests the money you deposit.

Advertising

A written or spoken media message designed to interest consumers in purchasing a product or service

The Children's Online Privacy Protection Act

Aims to protect the privacy of children under the age of 13 by requesting parental consent for the collection or use of any personal information of the users.

Traditional IRA

An individual retirement account that allows individuals to contribute pre-tax income to investments that grow tax deferred

Certificate of Deposit (CD)

An interest-earning deposit that requires the funds to remain deposited for a fixed term. Withdrawal of the funds before the term expires results in a financial penalty.

Mutual Fund

An investment program funded by shareholders that trades in diversified holdings and is professionally managed.

Promotion

Any form of communication used to inform, persuade, or remind

Predatory Lending

Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.

Disposable Income

Income remaining for a person to spend or save after all taxes have been paid

Credit Card Fraud

Intentionally using someone's credit card to steal money or goods

Free Trade

International trade left to its natural course without tariffs, quotas, or other restrictions.

Power of Attorney (POA)

Legal document in which one person appoints another person to act as an agent on his or her behalf

Forgery

The fraudulent making or altering of any writing in a way that changes the legal rights and liabilities of another.

Counterfeiting

The making or distributing of fake money

Policy Limit

The maximum benefit an insurance company will pay a policyholder if/when an insured event occurs.

Bitcoin

The most popular and fastest-growing digital currency

Retirement

The period of one's life after leaving one's job and ceasing to work.

Skimming

The practice of stealing money from an account, budget, etc. over a period of time in amounts that cannot be easily noticed.

Marketing

The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return

Specialization

The process wherein a company or individual decides to focus their labor on a specific type of production

Aspirational Buying

When consumers are encouraged to live like those they admire, even if they can't afford it.

Fraud

Wrongful or criminal deception intended to result in financial or personal gain