Economics Vocab Flashcards
Whenever limited resources are used to satisfy one want or need, there are an unlimited number of other wants and needs that remain unsatisfied
Opportunity Costs
An investment with high risk, but may produce high profit.
Speculative
The problem, which faces individuals, businesses, governments of satisfying unlimited wants with limited resources.
Scarcity
When you buy this investment, you are actually making a loan to the city, state, or federal government, or a corporation.
Bond
An investor buys shares in a fund which includes stock, bonds and money markets–the fund manager selects the assets contained in the fund.
Mutual Fund
Software that covertly gathers info about you through your internet connection without your knowledge—its purpose is usually for advertising.
Spyware
Things necessary for survival, such as food, clothing and shelter.
Needs
Using fake emails that appear to come from banks and other companies to try to con you out of personal info.
Phishing
Things that are not necessary for survival but that add comfort and pleasure to our lives.
Wants
A savings account that offers a higher rate of interest in exchange for larger-than-normal deposits. You have easy access to your money—can usually write a check to withdraw.
Money Market
The value of what you own or have invested.
Assets
The money you owe.
Liabilities (debts)
When your assets are more than your liabilities.
Positive Net Worth
When your liabilities are larger than your assets.
Negative Net Worth
A game plan that evaluates your current assets and debts, identifies the things you want/need and lays out a strategy to pay for them.
Financial Plan
The original amount you are investing.
Principal
It’s MAGIC. The ability of an asset to generate earnings that are then reinvested and generate their own earnings.
Compounding
An itemized listing of what you expect to make (income) and what you think you will spend (expenses).
Budget
A savings certificate issued by a commercial bank entitling you to receive interest. This certificate bears a maturity date, which means you cannot withdraw your money for a specific time period—6 months, 1 year, or 5 years.
CD
Electronic method of capturing a person’s personal information. They use a small device that scans your credit card and stores the information contained the magnetic strip
Skimming
Personal retirement plans that give you a tax incentive for participating. Only requirement for opening one is that you must use earned income
IRA
Retrieving personal paperwork and mail from trash dumpsters.
Dumpster Diving
Having your employer deduct cash directly from your paycheck pretax. Some employers also contribute cash to this retirement plan—called matching.
401 K Plan
The quantity of a product or service that businesses are willing and able to provide at a particular price.
Supply
