ECONOMICS

1. ECONOMICS Year in review

2. Market economy – economic system in which the people, rather than the government, own the resources and run the business • Mixed economy – an economy system that has characteristics of a market and a command economy • Command economy – government owned

3. Demand – the quantity of a good ofr service that consumers are will and able to buy at various prices during a given time period. • Supply – the quantity of a product that producers are will and able to make available for sale at various prices over a given time period.

4. Production – the creation of goods and services • Resources – things that are used to create other goods and services.

5. Endorsement – your signature on the back of a check, acknowledging that you received the funds of transferred your right to the funds to someone else • Automatic withdrawal – a bill paying arrangement in which your bank removes money from your account at a specified time and sends it to a company to pay your bill

6. Overdrawing – writing a check for more money than is deposited in your checking account • Debit card – card that transfers funds electronically from your checking account to the store’s account to pay for a purchase • PIN – your secret number that identifies you to an ATM as the owner of the ATM card

7. Credit – the ability to borrow money in return for a promise of future repayment • Budget –a plan for dividing income among spending and saving options • Money order – a check that draws on the money of the bank or other financial business that issued it. Example: You pay the bank or currency exchange and they issue one of their checks

8. Wire transfer – electronically moves money from an account in one bank to an account in a different bank. • Safe deposit box – boxes with individual locks that you may rent from a bank

9. Traveler’s checks – checks that you pay for in advance and if lost or stolen the company that you bought them from replaces them • Cashiers check – a bank’s own personal check signed by the bank’s cashier

10. Points – percent of the amount of the loan • Liability insurance – covers the other guy. In Illinois, a car owner is required to have this. • Implied warranty – if a seller sells a new product without a written warranty this warranty still covers the product.

11. Lien - When a creditor or bank has the right to sell the mortgaged or collateral property of those who fail to meet the obligations of a loan contract. • Lease – a rental agreement • Policy – insurance contract • Premium – regular payment required to purchase insurance.

12. Appraisal – expert’s determination of the value of a piece of property. • Comprehensive insurance – protects your car against fire and theft • Claim – formal request for payment from the insurance company when you suffer a loss

13. Deductible - The amount you pay for a loss before the insurance company pays anything • Replacement cost – the cost of replacing the item, regardless of market value • Collision insurance – covers your own car when in an accident that was your fault.

14. Certified check – same as a cashiers check except that it is also stamped by the bank • Points – percent of the amount of the loan • APR – the statistic that is most helpful in comparing different credit plans

15. APR - (Annual percentage rate) the statistic that is most helpful in comparing different credit plans. • 401k – a tax deferred retirement savings plan offered to employees by their employer.