Glossary Terms:

Timing Is Everything

Glossary terms from:
http://www.econedlink.org/e570


Alternative

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

Benefit

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

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.

Compound Interest

Interest that is earned not only on the principal but also on the interest already earned.

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.

Deposit

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

Distribution

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

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.

Investment Return

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

Long Run

A period of time long enough for firms to change the quantities of all the resources they use; the exact amount of time varies depending on the industry.

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.

Return

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

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 Plan

A plan for setting aside money for future use.

Spend

Use money now to buy goods and services.

Taxes

Compulsory payments to governments by households and businesses.

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.