Personal Finance Economics Test Questions

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automobile insurance
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this is used as protection against financial loss in the event of an accident while driving, or theft
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bond
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this is a contract to repay borrowed money, often issued by a company
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certificate of deposit
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this type of investment account has a specific fixed term/length, fixed interest rate,is insured by the FDIC, and is very low risk to consumers
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compound interest
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this is a method of calculating interest in which is added to the principal each period so that the principal continues to grow throughout the life of the loan or investment. the formula is A=C*(1+r/100)n
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credit
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ability to obtain goods and services before payment, or money lent or made available, both with specific guidelines for repayment
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credit union
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nonprofit cooperative that accepts deposits,makes loans, and provides other financial services
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credit worthiness
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this is a measured as to the likelihood of weather or not a person will default on a loan provided to them by a lending institution
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current yield
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annual interest rate paid by a bond
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debt
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this situation occurs when an entity a person, business, or government owes to another entity
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deductible
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the dollar amount of expenses that must be paid out of pocket before an insurer will pay any expenses of loss or liability
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disability insurance
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a type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time
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disposable income
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this is the economic term that refers to ones total income and is unable to work for a specified length of time
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dividend
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this is a portion of corporate profits paid to stockholders
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earnings
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this is a payment usually of money for labor or services usually according to contact and on an hourly basis
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excise tax
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this is a tax on production, transportation, sale or consumption of a certain good or service
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health insurance
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this is a used to pay for expenses related to maintaining the wellness of a person.
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incentive
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any factor, usually financial, to influence one choice over another by an individual or business
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income
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this is money that is gained for goods or services by an individual or business
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income tax
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this is a tax levied on net personal or business income
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inflation
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a rise in the general level of prices
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insurance
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a form or risk management purchased by a business or individual against a possible financial loss paid in the form of a monthly or annual premium
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interest
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this is a total charge that is applied to a person when they borrow money
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interest rate
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percentage of a financial loan which is paid as a fee over a period of time
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investment
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although it has many definitions, this is generally the act of providing funds to a financial organization for the purpose of making that advantages over a regular savings account
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IRA
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this special savings account created for an individual to spend when the person stops employment completely
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lender
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the intuition or individual that loans money to an individual or business at a set interest rate over a set period
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liability
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to be a fault, either financially or legally
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life insurance
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a special type of insurance paid to family or primarily beneficiary at the time of death of the policy holder
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monetary
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this term refers to a plan of the government to regulate that money in the nation
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money market
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a type of checking account that also earns interest
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mutual fund
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collection of investments, usually stocks, bonds, and other securities managed by a portfolio manager
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personal debt
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this term typically refers to money that a person owes to someone or to a financial balance
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preferred stock
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certificate of ownership in a corporation which does not entitle the holder to vote, but does not give claim to the assets to the company before the common shareholder
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premium
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the amount to be changed for a certain amount of insurance covered
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prime rate
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the lowest interest rate which banks charge their most reliable customers
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professional
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a worker with a high level of specialized training or education that is almost formalized
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progressive tax
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tax where the percentage paid in the increases as the level of income rises
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property
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this tax is locally assessed, varies according to the worth of land and goods on it, and generally funds things like public schools
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property insurance
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this specific type of policy is used as protection against financial loss in the event of damage to a structure or land
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proportional
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this is a type of taxation that takes the same percentage of ones income regardless of how much or how little one makes
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regressive
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type of taxation that takes a higher percentage of ones salary as ones income decreases
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return
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the profit or loss derived from an investment
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risk
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the potential that an investment will lose money
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sales tax
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this is a tax on goods and services, a percentage of the retail price
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savings
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this is the name to a type of bank account used by a person who wants to safely store their money over a long period of time, earring interest during that process
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semi skilled labor
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workers that may master a specific job with a few weeks of specific training
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simple interest formula
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the formula I=prt
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skilled labor
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labor with a high level of training, education, and experience
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skills
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the abilities acquired by workers through education, training, and experience that permits workers to be more productive
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SPLOST
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tax can be levied by any county for the purpose of funding the building and maintenance of parks, schools, roads, and other facilities
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stock
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certificate of ownership in a company which entitles the shareholder to vote for the board of directors for the corporation
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unskilled labor
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economic term for workers who are not to do specific task or operate specialized machinery

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