Vocab. A-E

Question 1

Asset

Answer 1

Items that one owns; they can be financial or non-financial in nature.

Question 2

Balanced budget

Answer 2

Government revenues equal expenditures.

Question 3

Banks

Answer 3

Corporations chartered by state or federal government to offer numerous financial services such as checking and savings accounts, loans, and safe deposit boxes; the Federal Deposit Insurance Corporation (FDIC) insures accounts in federally chartered banks.

Question 4

Budget

Answer 4

A plan for managing income and expenses

Question 5

Budget deficit

Answer 5

A shortfall of government receipts from government spending

Question 6

Budget surplus

Answer 6

An excess of government receipts over government spending

Question 7

Capital gains

Answer 7

Gains from selling stocks or other financial investments for more than what was paid for them.

Question 8

Commissions

Answer 8

Fees to a third party for assisting in a business transaction, such as buying or selling an asset.

Question 9

Compound interest

Answer 9

Interest credited daily, monthly, quarterly, semi-annually or annually on both principal and previously credited interest.

Question 10

Credit

Answer 10

All money borrowed, other than home financing.

Question 11

Credit bureaus

Answer 11

Organizations to which business firms apply for credit information on prospective customers.

Question 12

Credit card

Answer 12

Any card, plate, or coupon book that may be used repeatedly to borrow money or buy goods and services on credit.

Question 13

Credit reports

Answer 13

Statements containing information about prospective customers furnished by credit bureaus

Question 14

Credit unions

Answer 14

Not-for-profit cooperatives of members with some type of common bond (e.g., employer) that provide a wide array of financial services, often at a lower cost than banks.

Question 15

Creditworthy

Answer 15

Having the ability and willingness to repay debts.

Question 16

Debt

Answer 16

An obligation or liability to pay or render something to someone else.

Question 17

Debit card

Answer 17

A card issued by a bank that directly accesses available funds from a bank account, typically a savings or checking account.

Question 18

Deductions

Answer 18

Amounts that are or may be lawfully deducted from tax obligations.

Question 19

Discount rate

Answer 19

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank’s lending facility–the discount window.

Question 20

Disposable income

Answer 20

The income a person has left to spend or save after taxes and other required deductions have been taken out of his or her gross pay; net pay.

Question 21

Diversification

Answer 21

To distribute money among several financial investment tools in order to average the risk of loss

Question 22

Dividends

Answer 22

Periodic payments of the profit of a corporation to its stockholders or owners.

Question 23

Employee benefits

Answer 23

Something of value that an employee receives in addition to a wage or salary. Examples include health insurance, life insurance, discounted child care and subsidized meals at the company.

Question 24

Employer-sponsored savings plans

Answer 24

A government-approved program through which an employer can assist workers in building their personal retirement funds.

Question 25

Exemptions

Answer 25

Release from tax payments that the IRS allows.