Economics and Finance Review

Flashcards from lecture notes

Scarcity

The condition of having unlimited wants but limited resources.

Cost of using credit

Factors such as credit score, payment history, and the amount of debt.

Bodily Injury Liability Insurance

Covers injuries to others if you're at fault in an accident.

Comprehensive Insurance

Covers damage to your car from almost any event.

Collision Insurance

Covers damage to your car resulting from a collision.

Deductible

The amount you pay out-of-pocket before insurance covers the rest.

Policy Holder

The person or entity that holds an insurance policy.

Claim

A request for payment based on the terms of an insurance policy.

Premium

The amount you pay regularly to maintain an insurance policy.

Credit

The ability to obtain goods or services before payment, based on trust that payment will be made in the future.

Buying on credit

Purchasing something now and paying for it later.

Credit ratings

Lenders use these impacts to determine the interest rates and loan terms they offer.

Lowering your credit score

Late payments, high credit utilization, and bankruptcies.

Down payment

An initial payment made when buying something on credit.

Budget

A plan for how to spend and save money.

Secured loan

A loan that is backed by an asset.

Collateral

An asset pledged to secure a loan.

Fair Credit Billing Act

Protects consumers from billing errors and fraudulent charges; limits liability for unauthorized charges.

Identity theft

The unauthorized use of someone's personal information.

What to do if your identity is stolen

Report the theft to the FTC, file a police report, and contact credit bureaus.

Command vs market economy

A system where the government controls resources, versus a system driven by supply and demand

Mixed economy

An economy that combines elements of both market and command economies.

Business plan

A document outlining a company's goals and how it plans to achieve them.

Advertising

A way of persuading people to buy a product

Marketing

The process of creating, communicating, and delivering value to customers.

Marketing mix

The four Ps: Product, Price, Place, and Promotion.

Interest rate

The percentage charged on a loan or paid on savings.

Target market

The specific group of people a company aims to reach.

Tax form 1040

Used to file individual income tax returns.

Tax form W-2

Reports annual wages and taxes witheld.

Tax form W-4

Employee's Withholding Allowance Certificate.

Tax form 1099

Reports income earned as an independent contractor.

Warranty

A guarantee of the integrity of a product and the manufacturer's responsibility to repair or replace defective parts.

Product liability

The legal responsibility of manufacturers for injuries caused by defective products.

Four basic consumer rights

The right to safety, the right to be informed, the right to choose, and the right to be heard.