Financial Terms and Definitions

Borrower: A person who borrows money to finance purchases or investments, usually with the expectation of repayment.

Demand: Refers to how much of a good or service is wanted by consumers. Demand can be influenced by factors including price and availability, indicating a relationship where higher prices might reduce demand and vice versa.

Availability: This term describes how easy or difficult it is to obtain certain goods or services, which can impact demand and market conditions.

Budget: An organized plan that outlines expected income and expenditures, helping individuals or businesses manage their finances effectively.

Capital: Refers to financial assets like money, property, or resources owned by an individual, family, or business, vital for investment, operations, and growth.

Charity: An organization focused on helping individuals in need, such as the poor, ill, or those with special requirements, often funded through donations.

Checking Account: A bank account that allows for easy deposit and withdrawal of money, typically used for day-to-day transactions and payment of goods and services.

Cost: The monetary value paid for goods and services; this typically represents the worth perceived by consumers and the expenses incurred by providers.

Credit: Money loaned to an individual or business that must be repaid over time, usually with interest. It's a vital tool for financing larger purchases.

Credit Card: A plastic card that allows users to borrow money from a financial institution to make purchases, which must be paid back later, often with interest.

Deposit: Money placed into a bank account (checking or savings) that increases available funds for spending or saving.

Donate: The act of giving money or resources to charitable organizations to support those in need, aimed at fostering social welfare.

Expense: The costs incurred through the purchase of goods or services, which reduce the amount of money available to the spender.

Human Capital: Encompasses the education, skills, knowledge, experiences, and abilities of an individual, contributing to their value in the job market.

Income: The earnings received in exchange for work or investment, typically measured weekly, monthly, or annually.

Interest: Money paid by borrowers to lenders as a fee for using their funds, usually calculated as a percentage of the borrowed amount.

Labor: Refers both to the act of working (verb) and the collective group of individuals employed by a business (noun), playing a critical role in the production of goods and services.

Lender: An individual or institution that provides funds to borrowers, expecting repayment along with interest.

Planned Spending: Anticipated expenditures for essential needs (like food and housing) and savings for desired wants (like vacations), aiding financial stability.

Scarcity: A condition where demand exceeds supply, often resulting in shortages that can affect prices and availability of goods and services.

Unplanned Spending: Expenditures for unexpected items or emergencies (like repairs or sudden illnesses), which can disrupt budget plans.

Wage: Regular payments made to employees, commonly inspired by hours worked, serving as compensation for labor.

Withdrawal: The action of removing money from a savings or checking account, reducing available funds.