Economics And Personal Finance Final Exam

Credit Score

A ________ is the number listed on a consumer credit report that represents a statistical summary of the information.

In what kind of economy does the government make all the decisions?

A command economy

Medicaid

A health care program administered by the individual states with funding from the federal government. Those who meet certain guidelines, including income requirements, are eligible to have medical expenses paid.

Late Fee

A monetary charge assessed on an account holder who has not made a payment on the account by the expected due date.

Social Security Number

A number which is assigned by the government to people in the United States of America, for purposes of the Social Security System such as taxation.

Creditor

A party to whom money is owed.

Tax

Compulsory monetary contribution to the state's revenue, assessed and imposed by a government on the activities, enjoyment, expenditure, income, occupation, privilege, property, etc., of individuals and organizations.

In which type of business ownership are shares of stock sold to raise money?

Corporation

Checks

Demand draft drawn on a bank against its maker's funds, to pay the stated amount of money to the bearer or named party, demand on a stated date or after.

Demand

Desire for certain good or service supported by the capacity to purchase it.

Credit Report

Document supplied by a bank or a credit reporting agency that summarizes an entity's credit history and present financial position.

Examples of how to use a credit card responsibly

Don't purchase things you know you can't afford, don't exceed your credit limit, never give credit card info to an unauthorized source

Corporation

Firm that meets certain legal requirements to be recognized as having a legal existence, as an entity separate and distinct from its owners. They are owned by their stockholders (shareholders) who share in profits and losses generated through the firm's operations.

Deduction

Fixed amount or percentage permitted by taxation authorities that a tax payer can subtract from his or her adjusted gross income to arrive at the taxable income.

What kind of taxes are the same for all of us, no matter where we live in the U.S.?

Income Tax

Progressive Tax

Income tax that takes a larger percentage of a larger income and a smaller percentage of a smaller income.

IRS

Internal Revenue Service; The federal agency responsible for administering and enforcing the Treasury Department's revenue laws.

Bankruptcy

Legal procedure for liquidating a business (or property owned by an individual) which cannot fully pay its debts out of its current assets.

Credit Limit

Maximum amount of money a borrower can charge on, or withdraw from, a particular credit account.

Tax Base

Measure upon which the assessment or determination of tax liability is based. For example, taxable income is the tax base for income tax and assessed value is the tax base for property taxes.

What does staying on budget mean?

Not surpassing the amount of money set aside for your spending period

Law of Demand

Observation that, as a general rule, the demand for a product varies inversely with its price lower prices stimulate demand and higher prices dampen it.

What is the main incentive for a manufacturer to sell a product?

Profit

What do Social Security taxes pay for?

Retirement Benefits

Savers and borrowers are linked through financial institutions when...

Savers deposit money that is used to loan money to borrowers

Why does the federal government collect income taxes throughout the year as people earn wages?

So the government can pay bills as they come due

What might a government provide as part of a safety net for the people?

Social Security

A ________ is the most difficult type of business to set up and maintain.

Sole Proprietorship

In a ______, the owner has unlimited liability for any business debts.

Sole Proprietorship

Annual Percentage Rate

Standardized method of quoting the effective interest rate (actual cost of credit) on consumer loans, specially where interest is computed on monthly or other non-annual basis. It includes all fees (except penalties), and takes into account the continual reduction of principal amount through amortization.

Financial Goals

The monetary objectives of an individual or organization that are often determined by their future requirements for funds.

What do Equifax, Experian, and TransUnion have in common?

They are the three major credit bureaus

What EPF term best describes the ability to stay focused and meet deadlines?

Time Management

Personal Finance

Use of the principles and techniques of corporate finance in an individual's money affairs, especially the methods of allocation of financial resources. It involves making prudent financial decisions, budgeting, saving, investing, insurance, tax planning, retirement planning, and estate planning.

A piano maker builds 20 pianos per month. Her total costs are $6,000 per month. What is the average cost of each piano?

$300

Debtor

A person who owes money.

Credit

An agreement based largely on trust under which goods, services, or money is exchanged against a promise to pay later.

Budget

An estimate of costs, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals.

Annual Fee

Any fee that is charged on an annual (yearly) basis. One of the most common occurrences of an annual fee is the fee that is charged by some credit card companies to their credit card holders, simply for having the credit card.

What is a characteristic of a traditional economy?

Based on hunting, fishing, and gathering

The United States is a mixed economy based on...

Based on the principles of the free market, but allowing some government interventions

When you use a _____the money is automatically and immediately transferred from your account.

Debit card

At the end of the month you subtract your actual expenses from your actual income. If the result is less than zero, what do you have?

Debt

_______ is the study of how people produce, distribute, and use goods and services.

Economics

What do businesses try to establish to avoid having a surplus or a shortage?

Equilibrium

Grace Period

Extra time allowed for meeting with a requirement, satisfaction of an obligation, or implementation of an agreement.

Equity

Fairness and impartiality towards all concerned, based on the principles of evenhanded dealing.

When you withdraw money, the amount is...

Subtracted from your account balance

Regressive Tax

Taxation that takes a larger percentage of a lower-income and a smaller percentage of a higher income.

If prices rise and income stays the same, what happens to demand?

The demand goes down

Economic Wants

The human motives that induce the business and economic activities which produce the desired goods and services, or the means to acquire them.

Revenue

The income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted.

A ______ is an organization that provides goods or services.

business

Each society answers three basic economic questions based on...

its unique combination of values and goals

Supply and demand has a direct impact on the _______ of goods and services.

price