Glossary Terms:

Jesse 'The Body' Wants to Give Money Away!

Glossary terms from:
http://www.econedlink.org/e33


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.

Benefit

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

Budget

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

Budget Surplus

Refers to national budgets; occurs when government income is greater than government spending in a given year.

Capital

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Choice

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

Credit

The opportunity to borrow money or to receive goods or services in return for a promise to pay later.

Decision Making

Reaching a conclusion after considering alternatives and their results.

Distribution

The allocation or dividing up of the goods and services a society produces.

Distribution of Income

The way in which the nation's income is divided among families, individuals or other designated groups.

Economic Efficiency

A situation in which no one in a society can be made better off without making someone else worse off.

Economic Growth

An increase in real output as measured by real GDP or per capita real GDP.

Federal Income Tax

A tax paid by individuals and businesses to the federal government to fund such services as national defense, human services, and the monitoring and regulation of trade.

Federal Reserve

The central bank of the United States. Its main function is controlling the money supply through monetary policy. The Federal Reserve System divides the country into 12 districts, each with its own Federal Reserve bank. Each district bank is directed by its nine-person board of directors. The Board of Governors, which is made up of seven members appointed by the President and confirmed by the Senate to 14-year terms, directs the nation's monetary policy and the overall activities of the Federal Reserve. The Federal Open Market Committee is the official policy-making body; it is made up of the members of the Board of Governors and five of the district bank presidents.

Government Spending

Spending by all levels of government on goods and services; includes categories like military, schools and roads.

Households

Individuals and family units that buy goods and services (as consumers) and sell or rent productive resources (as resource owners).

Income

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

Income Inequality

The unequal distribution of an economy's total income among families, individuals or other designated groups.

Income Tax

Payments made by individuals and corporations to the federal government (and to some state and local governments) based on income received (both earned and unearned).

Interest

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

Internal Revenue Service (IRS)

The government agency that collects federal income taxes.

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.

Occupation

A job or profession; also a category of work, sometimes identified by the degree of skill required.

Poverty

The state of being poor, variously defined. Sometimes defined relatively--by reference, for example, to the average household income in a nation or region. Sometimes defined absolutely--by reference, for example, to the income needed to provide for adequate food, housing and clothing in a nation or region.

Progressive Tax

A tax that take a larger percentage of income from people in higher-income groups than from people in lower-income ones; the U.S. federal income tax is an example.

Proportional Tax

A tax that takes the same percentage of income from people in all income groups.

Redistribution of Income

The transfer of income (in cash or in kind) through government taxation, spending and assistance programs targeted at particular income groups, and programs designed to provide training to workers or to encourage private investments in education or other kinds of human capital. The goal is to transfer money from higher-income groups to lower-income groups.

Regressive Tax

A tax that takes a larger percentage of income from people in lower-income groups than from higher-income ones. Sales taxes and excise taxes are examples.

Return

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

Revenue

The money a business receives from customers who buy its goods and services. Not to be confused with profit.

Sales Tax

Tax in the form of a percent of the cost of a good or service; paid to local and state governments when goods and services are purchased.

Surplus

The situation that results when the quantity supplied of a product exceeds the quantity demanded. Generally happens because the price of the product is above the market equilibrium price.

Taxation

Taxation is the process in which a charge is imposed upon a taxpayer by a state or a legal equivalent of a state.

Taxes

Compulsory payments to governments by households and businesses.

Wants

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

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.