pre-test vocab words

FDIC

Federal program that insures the deposits a consumer makes into their account up to $250,000 per insurer and per bank.

Gross pay

The amount people earn per pay period before any deductions or taxes are paid.

Net pay

Gross pay minus deductions and taxes.

OASDI

(Old Age, Survivors, and Disabled Insurance) provides retirement benefits to those of old age, survivors of workforce incidents, and disabled individuals.

FIT

(Federal Income Tax) the tax levied by the federal government on personal income. This collected tax is put towards national defense, law enforcement, and foreign affairs.

Social security

A federal system of old-age, survivors, disability, and hospital care insurance that allows a sum to be deposited into accounts for living assistance.

Medicare

A federal health care program that pays for certain medical and hospital costs for people aged 65 and older and some with disabilities; part of Social Security.

Medicaid

A jointly administered federal and state health care program for low-income people, which works by covering the cost for some medical bills.

Supply and demand

The amount of product, quality, or service that exists and the consumer desire to obtain these items. This measures the price of the product.

Equilibrium

A state of balance in the market where demand of the consumers matches the quantity the producer has, therefore creating a stable price.

Preferred stock

(Equity) is shares in a firm that have a senior claim over common shareholders on the assets of a firm in the event of bankruptcy. A firm must pay preferred dividends on these shares, according to a contractually specified schedule at a deemed rate.

OSHA

(Occupational Safety and Health Administration) a federal agency within the US department of labor, ensuring safe and healthy working conditions for employees.

Debit vs credit card

A debit card allows money to be withdrawn or payments to be made directly from the holder's bank account. It is administered by banks. A credit card can be used to purchase products on credit, meaning the cardholder has to pay back the balance spent. Credit cards are administered by banks, retail stores, and other businesses.

IPO

(Initial Public Offering) a company’s first sale of stock to the public.

Federal reserve system

The central bank system of the United States, which acts to stabilize the financial system.

Dividends

A share of a company’s net profits paid to stockholders.

Credit score

A number based on information in a credit report, which indicates a person's credit risk, or the likelihood of the person to pay their bills on time.

Accounting equation

Assets = Liabilities + Equity

Collision insurance

Vehicle insurance that provides coverage for repair or replacement when damage is due to an accident with another vehicle or object.

Liability insurance

Insurance coverage for injuries or damages the insured person causes to others.

Comprehensive insurance

Vehicle insurance that provides coverage for theft or damage that is not from a collision.

Bodily Injury Liablity

The part of your insurance that helps pay for injuries to others if you're at fault for an accident.

Deductible

An amount you must pay for expenses before the insurance company pays. The deductible amount is specified by the terms of the insurance policy.

APR

(Annual Percentage Rate) The percentage cost of credit on an annual basis and the total cost of credit to the consumer. APR combines the interest paid over the life of the loan and all fees that are paid up front.

Beneficiary

The person designated to receive benefits, usually those of which belonged to a deceased owner.

Compound interest

Interest computed on the sum of the original principal and accrued interest.

Tariffs

Taxes on imported goods; a tax that must be paid before a good may be brought into a country.

Rule of 72

A method to estimate the number of years it will take for a financial investment (or debt) to double its value (or cost). Divide 72 by the interest rate (percentage) to determine the approximate number of years it will take the investment (debt) to double its value (cost).

Valid contract

A legally binding agreement between two or more parties that creates enforceable agreements.

Void Contract

A contract that is unenforceable from the moment it is created.

Voidable contract

A legal contract that can be cancelled by both parties due to the contract being fraudulent, incapacitant, or misrepresented.

GDP

(Gross Domestic Product) The total market value of all final goods and services produced in an economy in a given year calculated by using a base year's price for goods and services.

Product life cycle

Development (research and design), Introduction (launch to the market), Growth (sales increase), Maturity (market peak), Decline (sales slow down).

Steps in the decision making process

Identifying the problem, collect information, discover alternatives, choose from the alternatives, implement action, and evaluate the results.