Scarcity- is the basic economic problem. It is the situation of not having enough resources to satisfy one’s wants.

Opportunity cost – is the cost of the “next best use” of your money or time when you choose to do one thing rather than another.

Business cycle – alternating periods of economic growth and decline

Depression – state of the economy with high unemployment, severely depressed real GDP, and general economic hardship.

Recession - a period of declining economic activity lasting six of more months

Gross Domestic Product – total market value of all final goods and services produced in a country during a single year

Inflation – a long-term increase in the general level of prices

production possibilities -

capitalism – a system in which private citizens own most, if not all, of the means of production ad decide how to use them within legislated limits

socialism – system in which government owns some factors of production and distributes the products and wages

mixed economy – a system combining characteristics of more than one type of economy

traditional economy – an economic system in which the decisions of what, how, and for whom to produce are based on custom or habit

market economy – an economic system in which individuals and businesses own all resources and make economic decisions on the basis of price

command economy – an economic system in which the government makes the major economic decisions

shortage – situation in which the supply of the good or service available is less than the demand for it

surplus - situation in which the amount of a good service supplied by producers is greater than the amount demanded by consumers

equilibrium price – the price set for a good or service in the marketplace, where demand and supply are perfectly balanced

supply and demand – (supply) the amount of goods and services that producers are willing and able to sell at a range of prices (demand) the amount of a good or service that consumers are willing and able to buy over a range of prices

circular flow of economic activity – a model showing how goods, services, and money flow among sectors and markets in the American economy

trade-offs – the alternative you face if you decide to do one thing rather than another

Balance of Trade (Favorable/Unfavorable) – the difference between the value of a nation’s exports and its imports

Business cycle – alternating periods of economic growth and decline

Comparative Advantage – a country’s ability to produce a good more efficiently than other

Depression – state of the economy with high unemployment, severely depressed real GDP, and general economic hardship

Embargo – an agreement among a group of nations that prohibits them all from trading with a target nation

Exports – to sell goods to other countries

Fiscal Policy – how the government uses taxes and spending to reach economic goals

GDP - total market value of all final goods and services produced in a country during a single year

Imports – to buy goods from another country

Inflation – a long-term increase in the general level of prices

Intellectual Property -

Interest Rate – the payment people or institutions receive when they lend money or allow someone else to use their money

Labor Unions – association of workers organized to improve wages and working conditions

Laissez-Faire  - a belief that government should not interfere in the marketplace

Loose money policy (easy money)

Monetary Policy – manipulation of the money supply to affect the cost of credit, economic growth, and price stability

Real GDP (per capita) – GDP after adjustments for inflation

Recession – a period of declining economic activity lasting six or more months

Reserve requirements – the percentage of a deposit that banks have to set aside as cash in their own vaults or as deposits in their Federal Reserve district bank

Surplus – situation in which the amount of a good or service supplied by producers is greater than the amount demanded by consumers

Tariff – a tax on an imported good

Unemployment rate – the percentage of people in the civilian labor force who are not working but are looking for jobs

Capitalized Interest - Unpaid interest that has been added to the principal balance of a loan

Cosigner - Someone who legally agrees to take responsibility for a person's debt if they cannot repay it

Cost Of Attendance - Total expense of going to college which may include tuition, room and board, fees, books and supplies, transportation, health insurance, etc. Also known as Sticker Price or a school's published price.

Default - Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score

Deferment - A process that allows a borrower to pause their federal student loan payments; interest does NOT accrue during this time period on subsidized loans

Delinquency - Describes the status of being behind on one or more loan payments

Direct Plus Loans - A federal loan available to graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools

Direct Subsidized Loan - A federal student loan available to undergraduate students; the federal government pays interest on the loan as long as the student is in school at least part-time

Direct Unsubsidized Loan - A federal student loan available to undergraduate and graduate students; the student is responsible for paying the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into the principal amount of their loan

Disbursement - A portion of a federal student loan that the school pays out by applying the funds to the student's school account or by paying the borrower directly. Students generally receive their federal student loans in more than one disbursement.

Entrance Counseling - A mandatory information session which takes place before a student receives their first federal student loan. It explains their rights and responsibilities as a student borrower.

Expected Family Contribution (EFC) - An index number used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your Free Application for Federal Student Aid (FAFSA) form. It's reported to you on your Student Aid Report (SAR).

Exit Counseling - A mandatory information session which takes place when a student graduates, leaves school, or attends school less than half-time. It explains the student's loan repayment responsibilities and when repayment begins.

Federal Student Aid - The largest form of student aid in the country; federal aid programs come in the form of government grants, loans, and work-study opportunities

Financial Aid Offer - The total amount of financial aid (federal and nonfederal) a student is offered by a college, designed to help meet a student’s education costs

Fixed-Rate Loan - A loan with an interest rate that does not change over the life of the loan

Forbearance - A process that allows a borrower to pause their federal student loan payments; interest continues to accrue during this time period and may be capitalized

Free Application for Federal Student Aid (FAFSA) - A free online application that current or prospective college students can submit each year to determine their eligibility for financial aid

Gift Aid - Financial aid that does not have to be paid back, such as scholarships and grants

Grace Period - A period of time during which a borrower is typically not required to make loan payments. It generally begins on the day after a borrower graduates, leaves school, or drops below half-time enrollment. This period typically lasts 6 to 9 months but can vary.

Grants - Student aid coming from the state or federal government, the school, or from private sources that does not need to be repaid

Interest Rate - The rate charged for borrowing money usually expressed as a percent of the amount borrowed

Loan Refinancing - A process that REPLACES one or more existing federal or private loans with a new private student loan, ideally with a lower interest rate

Loan Consolidation - A process that allows a borrower to COMBINE multiple federal loans into one, allowing the borrower to make one monthly payment. The new interest rate of the loan is a weighted average of the prior loans' rates.

Loan Servicer - The organization that collects payments on a loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a loan on behalf of a loan holder

Master Promissory Note (MPN) - A legal document in which you promise to repay your federal student loan(s) and any accrued interest and fees to your lender or loan holder

Needs - Expenses that are essential for you to be able to live and function

Net Price - The actual cost a student pays to attend a school, calculated as the sticker price minus grants and scholarships

Pell Grant - A federal grant usually awarded to undergraduate students who display exceptional financial need and have not earned a bachelor's, graduate, or professional degree. This grant does not have to be repaid.

Prepayment Penalty Fee - A fee that some lenders charge if you pay off all or part of your loan early

Principal - Original amount of money borrowed, separate from interest or fees

Private Student Loan - A non-federal student loan made by a bank, credit union, or other entity, which sets the terms and conditions for the interest rate, grace period, and length of repayment

Repayment Period - The maximum time period over which you must repay your student loan -- currently between 10 and 30 years for Federal loans

Repayment Plan - A plan that outlines your monthly loan payment, repayment period, and how much interest you will pay over the life of the loan

Room And Board - Cost of housing and food while at college

Scholarship - A type of aid primarily awarded for academic merit (good grades) or for something you have accomplished (volunteer work, athletics, etc.) that does not need to be repaid

Sticker Price - Total expense of going to college which may include tuition, room and board, fees, books and supplies, transportation, health insurance, etc. Also known as Cost of Attendance or a school's published price.

Student Aid Report (SAR) - The report you receive after submitting your FAFSA. It contains your EFC, Pell Grant eligibility, whether you've been selected for verification, and all other information that colleges will use to determine your financial aid package.

Work-Study - A federal program that provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses

Tuition - The sticker price for the academic portion of your college expenses, which does not include room and board, textbooks, or other fees

Variable-Rate Loan - A loan in which the interest rate can change, based on prime rate or index rate, over the course of the loan

Wants - Expenses that help you live more comfortably