Glossary Terms:

You've Won The Lottery! Now What?

Glossary terms from:
http://www.econedlink.org/e1016


Bond

A certificate of indebtedness issued by a government or a publicly held corporation, promising to repay borrowed money to the lender at a fixed rate of interest and at a specified time.

Cash

Money in the form of paper currency or coins (as distinct from checks, money orders or credit).

Check

A written order to a financial institution directing the financial institution to pay a stated amount of money, as instructed, from the customer's account.

Choice

Decision made or course of action taken when faced with a set of alternatives.

Consumers

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Consumption

Spending by households on goods and services. The process of buying and using goods and services.

Costs

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Decision

A conclusion reached after considering alternatives and their results.

Income

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

Inflation

A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation).

Interest

Money paid regularly, at a particular rate, for the use of borrowed money.

Interest Rate

The price paid for using someone else's money, expressed as a percentage of the amount borrowed.

Investing

The process of putting money someplace with the intention of making a financial gain. Investment possibilities include stocks, bonds, mutual funds, real estate, and other financial instruments or ventures.

Investment

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.

Markets

Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Opportunity Cost

The second-best alternative (or the value of that alternative) that must be given up when scarce resources are used for one purpose instead of another.

Rate of Return

Earnings from an investment, stated as a percentage of the amount invested; usually calculated on an annual basis.

Real Interest Rates

The nominal (posted) interest rate minus the rate of inflation.

Resources

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

Return

Earnings from an investment, usually expressed as an annual percentage.

Saving

Disposable income (income after taxes) minus consumption spending.

Savings

Money set aside for a future use that is held in easily-accessed accounts, such as savings accounts and certificates of deposit (CDs).

Savings Account

An interest-bearing account (passbook or statement) at a financial institution.

Taxes

Compulsory payments to governments by households and businesses.

Utility

An abstract measure of the satisfaction consumers derive from consuming goods and services.

Value of Money

The ability of money to buy goods and services. A wide variety of items has been used as money. Money need not have any intrinsic value. It is people's willingness to accept it that gives it value.

Work

Effort applied to achieve a purpose or result, often for pay; skills and knowledge put to use to get something done; employment at a job or in a position; occupation, profession, business, trade, craft, etc.

Workers

People employed to do work, producing goods and services.