Glossary Terms:

You Can BANK on This! (Part 2)

Glossary terms from:
http://www.econedlink.org/e584


Bank

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

Banking

The industry involved with conducting financial transactions. Also, conducting business with a bank, e.g., maintaining a checking or savings account or obtaining a loan.

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.

Capacity

In the context of credit transactions, capacity 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 and future earnings relative to current debt. High earnings and low debt, for example, indicate a strong capacity to make payments on the loan in question.

Choice

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

Coins

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

Consumers

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Consumption

Spending by households on goods and services. The process of buying and using goods and services.

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.

Currency

The money in circulation in any country.

Decision

A conclusion reached after considering alternatives and their results.

Decision Making

Reaching a conclusion after considering alternatives and their results.

Decision-Making Grid

A graph-like form into which people may enter notations about the costs and benefits of various alternatives; used for assistance in making decisions.

Economic Wants

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

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.

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.

Purchases

In a credit arrangement, the total amount spent during the billing cycle.

Resources

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

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.

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.

Scarcity

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.

Services

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

Spend

Use money now to buy goods and services.

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.