Glossary Terms:

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

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

Government-issued pieces of metal that have value and are used as money.

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

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

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

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.

The additional income earned from saving or investing money, often expressed as an annual percentage of the amount invested.

The ease with which savings or investments can be turned into cash.

The chance that the value of an investment will go down because of a change in supply and demand.

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.

The fee paid for insurance protection.

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.

Income received for entrepreneurial skills and risk taking, calculated by subtracting all of a firm's explicit and implicit costs from its total revenues.

Property such as land, houses and office buildings.

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

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

The chance of losing money.

An exchange of goods or services for money.

The condition that exists because human wants exceed the capacity of available resources to satisfy those wants; also a situation in which a resource has more than one valuable use. The problem of scarcity faces all individuals and organizations, including firms and government agencies.

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

The exchange of goods and services for money or other goods and services.

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