vocab unit 5 Flashcards
An economy based on the direct trade of goods and services.
Barter economy
Money that has value because the item used as money has an intrinsic value.
commodity money
Money that has value simply because some government, institution or business says that it does.
fiat money
An item that is acceptable as payment in the trade of a good or service.
medium of exchange
An item that is used to compare the monetary worth of different goods and services.
standard of value
An item that retains its monetary worth over time.
store of value
Bank accounts that allow the owner easy access to the held money.
demand deposit accounts
A representative currency whose value is back by gold held by the country.
gold standard
The agency responsible for insuring the deposits within American banks.
FDIC
Bank accounts that give the customer interest on the money deposited.
savings
A type of time deposit giving guaranteed interest over a fixed amount of time, with penalties for early withdrawal.
certificate of deposit
An institution that offers banking services but is owned by those that have deposited money within it.
credit union
Putting money in a variety of investments to decrease risk.
diversification
The idea that investments have no guarantee, and that the investor may lose money.
risk
An investment with a government or business that has a guaranteed payment over a set amount of time.
bond
A bond sold by a city or county government.
municipal bonds
A bond issued by a bank to its customers.
savings bonds
A savings plan that gives the owner the ability to avoid or delay taxes on the money held in it.
IRA
An investment portfolio that gives the owner a proportional share of a larger investment in a variety of stocks, bonds, and other investments.
mutual fund
A plan put in place by a business to help its employees save and plan for retirement.
401K
The amount you are going to have to pay for taking out a loan.
interest
The percentage of the amount borrowed that you will be charged for taking out a loan.
interest rate
A traditional loan in which the borrower pays back the amount owed over a preset period of time. Also called a bank loan.
installment loan
A loan in which the borrower is allowed to continually borrow and payback money up to a preset limit. Also called a credit card loan.
revolving loan
A loan in which the borrower uses something of value that they own as collateral.
title loan
A short term loan which is typically intended to be paid off on your next payday.
payday loan
An item of value that is pledged to loan as security against default.
collateral
A person or business who is owed money.
creditor
Failure to pay back a loan.
default
When the exchange rate between two countries’ currencies is held constant and not allowed to fluctuate.
fixed rate mortgage
A home loan in which the interest can will change over time.
adjustable rate mortgage
The monthly payment a customer makes to maintain their insurance.
premium
The amount of money a customer must pay before the insurance company will pay.
deductible
