Glossary Terms:

The Story of Jack and the Bank Stalk

Glossary terms from:
http://www.econedlink.org/e66


Bank

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

Borrow

To receive and use something belonging to somebody else, with the intention of returning or repaying it--often with interest in the case of borrowed money.

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.

Coins

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

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.

Definition of Money

A medium of exchange which can be conveniently circulated and is seen as an effective form of currency.

Economics

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Exchange

Trading a good or service for another good or service, or for money.

Functions of Money

Money functions as a medium of exchange, a store of value, and also a unit of account.

Goods

Tangible objects that satisfy economic wants.

Interest

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

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.

Lend

To grant someone the use of something, on condition that the object borrowed or its equivalent will be returned (often with interest, in the case of money).

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.

Saving

Disposable income (income after taxes) minus consumption spending.

Services

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

Trade

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

Wants

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