Glossary Terms:

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


Monetary or non-monetary gain received because of an action taken or a decision made.


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.


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


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


Tangible objects that satisfy economic wants.


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


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).


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.


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.


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.


A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.


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.


Payments for labor resources; unlike wages, not explicitly based on the number of hours worked. See also Wages.


A regular payment, often at monthly or biweekly intervals, made by an employer to an employee, especially in the case of professional or white-collar employees. Salaries are paid for services rendered and are not based on hours worked.


Use money now to buy goods and services.


An ownership share or shares of ownership in a corporation.

Stock Market

A market in which the public trades stock that someone already owns; the buying and selling of stock.

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.


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.