honors econ personal finance etikerentse chapters 11 and 12

the test isn't till tuesday and it's saturday i'm literally such a good student

consumer

anyone who uses a good or service

personal finance

the way you plan to spend or save your income

budget

a consumer’s plan showing the sources and uses of income

comparison shopping

the act of reviewing products and prices charged by different businesses for similar products before making a purchase

rational consumer choice

a decision to buy or not buy a product so that your utility, or satisfaction, per dollar spent is maximized

consumer loan

borrowing money to be repaid in regular installments over time, such as a car loan

consumer sales credit

amounts charged to an account that involves variable payments over time, such as a credit card

secured loan

loan for which property is pledged to back its repayment, such as a home mortgage

unsecured loan

loan for which no specific property is pledged by the borrower that can be used to satisfy the debt if payments are not made, such as credit card debt

creditworthiness

the measure of your dependability to repay a loan

character

a measure of your financial responsibility

capacity

a measure of a consumer’s ability to repay a debt on time

capital

a measure of the value of things that a consumer owns that could be sold or cashed in to repay a loan

credit history

a person’s record of paying bills and debts over time

credit rating

the measure of a person’s creditworthiness

credit scoring

a system that assigns a number, or score, to each consumer indicating whether this person is a good or bad credit risk

Food and Drug Administration (FDA)

federal agency that sets standards for foods and drugs produced or sold in the United States

Federal Trade Commission (FTC)

government agency that tries to ensure that businesses compete and market their products fairly and honestly

cease and desist order

FTC-issued directive to stop a firm from making a false or misleading advertising claim

Consumer Product Safety Commission (CPSC)

federal agency created to protect consumers from dangerous products they might purchase or use

Environmental Protection Agency (EPA)

federal agency that interprets and enforces laws passed by Congress that involve the environment

identity theft

crime in which one person fraudulently uses another’s identity to obtain credit or to access financial accounts

saving

the act of choosing not to spend current income

return

income earned from funds that are not spent

compound interest

computed on the amount saved plus the interest previously earned

annual percentage yield (APY)

formula banks must use to calculate interest they pay on deposits

certificate of deposit (CD)

savings instrument with fixed interest rate and fixed maturity date

money market accounts

bank accounts that allow depositors a limited number of transactions per month; interest is slightly higher than on a savings account but can vary from day to day

investing

using your savings in a way that earns a return

corporate stock

shares of ownership in a corporation

diversification

investing in a wide variety of firms

mutual fund

a financial organization that accepts funds from many people and invests them in a variety of stocks

corporate bonds

loan that entitles an investor to be repaid at the specified date and receive interest until that date

financial planner

expert who gives investment advice for a fee

insurance

protection you purchase against losses beyond your ability to withstand

policy

legal contract between an insured person and an insurance company

property insurance

protects policyholders from losses to their property

deductible

the amount that an insured person must pay before the insurance company pays anything

liability insurance

protects against losses from other injuries you cause to another person or damage you cause to another’s property

personal insurance

protects against financial loss from injury, illness, or unexpected death of the insured person