Glossary Terms:

A Penny Saved is a Penny at 4.7% Earned

Glossary terms from:
http://www.econedlink.org/e157


Allowance

A sum of money paid regularly to a person, often by a parent to a child; sometimes paid in compensation for services rendered.

Alternative

One of many choices or courses of action that might be taken in a given situation.

Bank

A financial institution that provides various products and services to its customers, including checking and savings accounts, loans and currency exchange.

Bank Account

An arrangement by which a bank holds funds on behalf of a depositor. Also, the balance of funds held under such an arrangement, credited to and subject to withdrawal by the depositor.

Budget

A spending-and-savings plan, based on estimated income and expenses for an individual or an organization, covering a specific time period.

Choice

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

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.

Deposit

Money put into a financial account. Also, to place money in a financial account.

Economics

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Goods

Tangible objects that satisfy economic wants.

Income

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

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.

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.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Save

To keep money for future use; to divert money from current spending to a savings account or another form of investment.

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.

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Spend

Use money now to buy goods and services.

Wants

Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs.