Alphabetically A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

If you're unsure of a financial term or concept cited in our site, you'll find the definition here.

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Paper tax return, prepared on a computer using the approved IRS tax preparation software. Taxpayers mail the form (return) to the IRS, and the IRS directly deposits refunds into savings and checking accounts.

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Retirement savings plan offered by employers. It makes a monthly deduction from an employee paycheck. The amount of money saved is not affected by federal income taxes until you retire.

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Ability-to-pay principle

This principle states that taxes ought to be paid by those who can best afford them.

Actual cash value

The amount it costs today to replace property that is damaged beyond repair with comparable property, minus depreciation.

Adjusted gross income

A person's entire income reduced by adjustments. Adjustments may include deductions for IRA (Individual Retirement Accounts), medical savings accounts, and alimony paid.


The cash advances posted to an account in the current billing period.


The reduction of the value of an asset by prorating its cost over a period of years. The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest.

Annual fee

Bank charge that is levied each year for use of a credit card, which may range from $15 to $300. It is billed directly to the monthly statement.

Annual Percentage Rate (APR)

Cost of credit calculated as an annual percentage.

Annual report

Report to stockholders containing a summary of the year?s operations and pertinent financial information.

Antitrust laws

Laws promoting competition and prohibiting the creation of monopolies and the restraint of trade.


Settling differences by allowing a third party (the arbitrator) to hand down a decision that is final and binding.


Something of value owned by a firm, household, or individual; what the company owns after debts are paid.

Associate's degree

Academic degree given to a student who completes courses at a two-year institution.

Auto insurance

Insurance, designed for automobile owners, that protects the owner from specific car-related financial losses during the term of the agreement.

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Bachelor's degree

Academic degree conferred by a college or university upon students who complete the undergraduate curriculum; also called baccalaureate degree.

Balance sheet

Financial statement summarizing a firm?s assets, liabilities, and net worth at a given point in time.


The last resort for a borrower. If the borrower cannot make payments, is completely extended beyond the credit limit, and the collection agencies are uncooperative; the borrower may need to file for protection.


Exchange of goods or services without money.


People who buy stock because they expect stock prices to fall.


Person who receives or is to receive the benefits from an insurance policy or trust property.

Benefits-received principle

States that taxes ought to be paid by those who benefit from a government program or service.

Black market

Illegal market in which goods are sold above their legal price.

Block grant

Lump sum given to communities by the federal government to be spent as the community deems appropriate.

Board of directors

Elected representatives of corporate stockholders.

Board of Governors

Group of presidential appointees who provide leadership and make policy decisions for the Federal Reserve.

Bodily injury liability

Pays legal defense costs and claims against insured if car injures or kills someone. Covers family members living with insured and others driving with the insured's permission.


Certificate of a corporation?s or the government?s indebtedness to the holder.


Financial plan that summarizes income and expenditures over a period of time.


People who buy stocks because they expect stock prices to rise.

Business taxes

Taxes paid on a business?s profits. Businesses also pay unemployment insurance, worker's compensation, Social Security, and Medicare insurance.


Rules of operation for a corporation, stated in the charter, that govern the corporate officers? actions.

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Capital resources

Buildings, tools, and machines people use to produce goods and services; one of the factors of production.


Profession or occupation that a person trains for and pursues as his or her life's work.

Cash advance

Amount paid before it is earned; a cash amount borrowed from a credit card.

Cash flow

Amount of money coming into and going out of a firm.

Cash value

Portion of the life insurance premium that is set aside to collect interest and grow.

Certificate of deposit (CD)

Certificate issued by banks that guarantees repayment of principal at a fixed rate of interest after a specified period of time.

Change in demand

People want to buy more or less of a product at all possible prices.

Charge account

Enables consumers to make purchases up to a specified amount without paying cash.


Document issued by a state government granting a corporation permission to operate.

Checking account

Bank account which allows the depositor to write checks.


Written orders directing a bank to pay a person or business a specific sum of money.

Closed corporation

One whose stock is not sold to the public.

Closed shop

Business in which workers must belong to the union before they can be hired.


Person with an acceptable credit rating who agrees to repay a loan if the borrower cannot.


Something with monetary value pledged as security for a loan.

Collective bargaining

Negotiations with management by a union to prepare a labor contract.


Institution of higher learning that grants degrees in liberal arts or science.

Collision insurance

Pays for repairs of damage to insured's car caused by a collision with another vehicle or any other object, regardless of who was responsible.

Commercial paper

Short-term notes issued by a corporation promising to repay a sum of money at a specified rate of interest.

Common stock

Shares of ownership in a corporation with voting privileges.

Community college

Junior college that generally offers two-year programs and is often supported with government funds.

Compound interest

Interest computed on the sum of the principal and the interest previously paid.

Comprehensive insurance

Pays for damages to insured's car resulting from theft, fire, hail, vandalism, or a variety of other causes.


To combine into a single whole; to make one.

Constant (real) dollars

Dollars that reflect changes in purchasing power from a base year; value of dollars adjusted for inflation.

Consumer co-ops (cooperatives)

Retail businesses owned by members who share in the profits and/or the purchases of goods and services at lower costs.

Consumer goods

Goods, such as food and clothing, that satisfy human wants through their direct consumption or use.

Consumer Price Index (CPI)

Index that compares present prices of commonly purchased goods and services to the prices of similar goods and services in a base year.


The theory that an increasing consumption of goods and services is economically desirable.


Members of households who use the goods and services that businesses produce. Those who buy goods or services for personal use.

Cooperative (co-op)

Association of individuals or companies that perform business functions for their members.

Corporate bonds

IOUs that corporations issue when borrowing money for long periods of time.


Business managed on the behalf of its owners/stockholders who provide the funds.

Cost-benefit analysis

Analysis of the cost effectiveness of various alternatives in order to see whether the benefits outweigh the costs.


Protection for specific losses provided under the terms of an insurance policy.

Craft worker

One of a wide variety of highly skilled workers, such as carpenters, tool-and-die makers, machinists, electricians, and automotive mechanics.


Enables purchaser to enjoy goods or services before paying for them fully.

Credit bureau

Agency that compiles, maintains, and distributes credit and personal information to creditors.

Credit card

Card that enables its holder to charge expenses on credit.

Credit counseling

Counseling about how to work out a realistic budget and debt repayment plan, as well as work with creditors.

Credit history

Record of an individual's or company's past borrowing and repaying behavior.

Credit limit

Maximum amount of credit that a bank or other lender will extend to a customer.

Credit over-extension

Spending more money in credit than affordable; inability to pay off credit bills.

Credit records

History of all purchases, loans, and payments.

Credit report

A summary of credit history that is critical to credit scoring systems, which lenders use to issue credit cards, mortgages, and other loans.

Credit union

Association of people that offers to members insured savings plans similar to those offered by banks.


One who lends money to another.


Paper money and coins issued by the federal government.

Current dollars

Value of dollars at a specified time, not adjusted for inflation.

Custodial accounts

College savings plan in which parent(s) make tax-free gifts to a child, which the child can use to pay for school once they reach age 18.

Cyclical unemployment

Unemployment resulting from changes in general levels of business activity.

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Declarations page

Portion of a policy booklet that information that pertains to the insured, including name and address of the insured, description of property, coverage, premium, and policy term.


Clause in an insurance policy that relieves the insurer of responsibility to pay the initial loss up to a stated amount.


Amount allowed to taxpayers under the Internal Revenue Code as an offset against gross income or adjusted gross income.


Failure to meet a financial obligation when it comes due.


When expenditures exceed income.


Opposite of inflation; a period of falling prices when the purchasing power of the dollar is rising.


Quantities of a good or service that consumers are willing and able to buy at specific prices and at a particular time.

Demand deposits

Checking accounts held by commercial banks.


Person who relies on someone else for financial support.


Value lost in assets as they wear out or become obsolete.


Process of making products unique.

Direct deposit

Payment of a dividend or other receipt into a checking or savings account, often by electronic mail.

Direct tax

Tax that cannot be shifted to others (unlike an indirect tax). A good example of a direct tax is the federal income tax.

Disability income insurance

Insurance that pays a monthly benefit to replace a percentage of income if the owner becomes disabled and unable to work.

Discount rate

Interest rate charged by the Federal Reserve on its loans to banks and other financial institutions.


Favoring one individual or group over another for reasons that have nothing to do with ability.

Disposable income

Money left after buying necessities.

District bank

One of 12 banks in the Federal Reserve System overseeing banking in its region.


Spreading risk out over multiple idustries, classes, or productgs.


Share of corporate profits paid to stockholders.

Doctor's degree

The highest degree or status conferred by a college or university, also called a doctorate; often abbreviated as Ph.D.

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Promotion and sale of goods and services over the Internet.

Earned income

All money earned. This includes wages, salaries, tips, net profit from a trade or business, and any other income received for personal services.

Earned income credit

Low-income workers can file a tax return to receive an earned income credit, even if no income tax was withheld from their pay.

Economic conditions

Condition of finances.


The study of people's producing and exchanging of goods and services. It is a social science that describes and analyzes how society chooses from among scarce resources to satisfy its unlimited wants.

Economies of scale

Reductions in cost resulting from large-scale production.


To get the most from one?s resources.


System that results from choices people make as consumers, workers, business owners or managers, and government officials.

Education IRA

Savings plans to be used by students younger than 30. The money deposited accumulates interest tax-free and can be used to pay for school-related expenses.


Person who takes a risk to create a new product or to develop a better way to operate a business.


The imagination, innovative thinking, and management skills needed to start and operate a business.


Ownership in a business.

Exchange rate

Price of one currency in terms of another.

Excise tax

Tax levied on the manufacture or sale of a specific item.

Exempt (from tax liability)

Before taxpayer's pay taxes, they claim a set amount of tax deductions for themseleves, their spouses, and eligible dependents. The deduction is subtracted from their adjusted gross income; then they are taxed on the remaining income.

Exempt (from withholding)

Taxpayers can be exempt from paying a certain amount of federal income tax if they meet certain income, tax liability, and dependency requirements.


Money that is spent.


An expenditure of money, a cost.

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Circumstances or conditions that bring about a result.

Federal Deposit Insurance Company (FDIC)

Federally sponsored corporation that insures accounts in national banks and other qualified institutions.

Federal income tax

Money that is withheld from employee paychecks to fund federal projects and services.

Federal Reserve system

The U.S. banking system.

Federal Supplemental Educational Opportunity Grant (FSEOG)

Grant for undergraduates with exceptional financial need.

Fee-for-service (FFS)

Insurance plan that offers flexibility in exchange for higher out-of-pocket expenses, more paperwork, and higher premiums.

Filing status

Determines tax bracket and amount of taxes to be paid. Factors such as marital status affect filing status.

Finance charge

Total amount charged for an extension of credit.

Financial aid

Assistance given in the form of money for educational purposes.

Financial markets

Savers exchange with borrowers and others who are willing to pay for use of the money.

Fixed rate interest

Interest rate that is not subject to adjustment.

Fixed rate mortgage

Mortgage in which the interest rate does not change during the entire term of the loan, most often 15 or 30 years.

Flat tax

Tax that eliminates most deductions and applies the same tax rate to all incomes.

Foreign exchange

Sale and purchase of currencies; any foreign currency.

Form W-2

Government form received in January each year that is used to file an income tax return. It provides a statement of earned wages, tips, and other compensation from the previous year, and reflects state and federal taxes, Social Security, Medicare wages, and tips withheld.

Form W-4

Government form completed by new or existing employees to declare personal exemptions for tax withholding purposes.


License to operate an individually-owned business in a specific geographic area as if it were a part of a large chain.

Free enterprise

Another term for market economy or capitalism.

Frictional unemployment

Temporary, unavoidable unemployment.

Fringe benefits

Items other than wages that the employer pays for, such as health insurance, retirement plans, and vacations.

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Grace period

Interest-free period of time a lender allows between the transaction date and the billing date. The standard grace period is usually between 20 and 30 days.

Graduate school

Institution of higher learning, usually a division of a university, that grants master's or doctor's degrees or both.


Money given to students, free of charge, for educational purposes; usually grants do not have to be repaid.


Money given by the federal government to state and local governments for a specific purpose.

Gross income

Total of taxpayer's income from any source.

Group insurance

Insurance offered through employers, unions, professional associations, and other organizations. As an employee benefit, the cost of group health insurance is normally covered in part by the employer, and the employer usually offers a choice of plans for its employees.

Group term life

A type of insurance offered by employers in which the part of the premium paid by the employee is deducted from their paycheck.

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Health insurance

Health care coverage obtained through individual, group, and other plans.

Health maintenance organization (HMO)

A form of group insurance that provides complete medical coverage for a flat annual fee.

Homeowner's insurance

Insurance that protects homeowners from financial losses caused by a broad range of disasters to home or personal property.

Horizontal equity

People in the same income groups should be taxed at the same rate. "Equals should be taxed equally."


One or more persons living in the same dwelling and functioning as an economic unit.

Human resources

Labor or the physical and mental efforts people use to create goods and services; one of the factors of production.


When the value of a currency falls at a rapid rate over a relatively short period of time.

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A reason to do something. In market economies, profit; interest; wages; and rents provide economic incentives.


Money earned through employment and investments.

Income tax

Tax on the income earned by individuals and corporations.

Individual health insurance

Insurance purchased directly by an individual that is not sponsored by an employer, union, or professional association.

Individual Retirement Account (IRA)

Self-funded retirement plan that allows contributions toward retirement; taxes on the interest earned in the account are deferred.


Period of rising prices when the purchasing power of the dollar is falling.


The basic facilities?such as roads, harbors, and utilities?on which the smooth operation of an economy depends.


Protection from the financial effects of emergencies.

Insurance policy

Legal contract that sets forth the rights and obligations of both the policyholder and the insurance company.


Insurance company.


Payment for using someone else?s money; income from allowing someone else to use one?s capital.

Interest bearing accounts

Account that offers interest on deposited money.

Interest income

Amount of all accumulated interest that is all fully taxable.

Interest rates

Percentage of a sum of money charged for its use.

Internal Revenue Services (IRS)

Government agency that collects income taxes.

Introductory rate

Low rate charged by a lender for an initial period to entice borrowers to accept the credit terms.


Purchase of capital resources used to produce goods and services; it may consist of shares in a corporation, real estate, or plant and equipment.

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There are no terms for the letter J at this time.

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There are no terms for the letter K at this time.

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Human resources or the physical and mental efforts people use to create goods and services.

Labor unions

Associations of workers formed to promote the interests of their members.

Law of diminishing returns

As more resources are added to a fixed amount of other resources, the additional amount produced eventually diminishes.


Any claim, or debt, of an individual or business; what a business owes.

Life insurance

Insurance policy that pays a death benefit to beneficiaries if the insured dies.


Maximum amount that will be paid for a covered loss by an insurance company.

Limited liability

Advantage of a corporation; allowing a stockholder no legal responsibility for the corporation's debts beyond the sum he or she has invested in the corporation.

Limited liability company

Combines the advantages of a corporation and a partnership with two or more members who serve as partners or shareholders.


Ability of an individual or company to convert assets into cash or cash equivalents without significant loss.


Sum of money lent at interest.

Loan consolidation

Loan that combines and refinances other loans or debt.

Loan default

Not repaying loans on time; loans may be turned over to a collection agency.

Loan forgiveness program

Under certain circumstances, the federal government cancels all or part of an educational loan.

Loan repayment

Options for repaying borrowed money.

Local income tax

Money that is withheld from employee paychecks to pay local income taxes. The employee may also pay this tax independently.

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Marginal benefit

Extra or additional benefit of a decision.

Marginal cost

Extra or additional cost of a decision.

Master's degree

Academic degree conferred by a college or university upon those students complete at least one year of prescribed study beyond the bachelor's degree.


Method for settling labor disputes in which a third party makes nonbinding suggestions.


Medicare provides hospital insurance and medical assistance to Social Security recipients.


Study of individual consumers and businesses.

Minimum wage

Lowest legal wage an employer can pay.


Anything that is generally accepted as payment for goods and services; legal tender.

Money market

Market for short-term credit instruments such as treasury bills.

Money market account

Savings account that offers higher interest rates than most savings accounts and is insured by the FDIC.

Money market funds

Mutual funds that use the resources of their investors to buy money market certificates.


Long-term loan to purchase property.

Mutual funds

Special investment companies in which people pool their savings to diversify their investments.

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Basic item that is required for a person's safety and for health.

Net Income

Money earned after taxes are deducted.

Net worth

The difference between a firm?s assets and its liabilities.

Not-for-profit corporation

Business that has been organized to serve some particular educational, social, charitable, or religious purpose rather than to earn a profit.

Notes payable

Short-term loans owed by a corporation.

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Job or profession.

Open corporation

Business whose stock is sold to the public.

Open shop

Business open equally to union and nonunion members.

Open-market operations

Buying and selling of government securities by a central bank, such as the Federal Reserve Bank in the U.S., in order to control the money supply.

Opportunity cost

Best alternative given up when making a choice.

Over-the-counter market

Decentralized market of dealers in the stock of small firms.

Overhead costs

Fixed costs of doing business.

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Business owned by two or more persons.


Check that pays an employee's wages from an organization.

Payment performance

Frequency and amount of payment against debt.

Payroll taxes

Taxes taken directly from a paycheck.

Pell grant

Grant awarded to undergraduate students who have not earned a bachelor's or professional degree and who demonstrate financial need.

Pension funds

Retirement accounts people obtain through their employers.

Pension plan

Plan for setting aside money to be spent after retirement.

Periodic rate

Variable rate on a credit card that may increase or decrease each quarter. If the rate increases, the finance charge increases and the minimum payment due may be greater.

Perkins loan

Need-based federal loan for students, which is issued by a participating school.

Permanent life insurance

Provides coverage for insured's entire life.

Personal income tax

Everyone pays a tax on his/her yearly total amount of taxable income.

Personal injury insurance

Pays medical expenses resulting from an accident for driver and others riding in the insured's car. Also pays for medical expenses resulting from injuries received while riding in another's car or while walking.

PLUS loan

Federal Parent Loan for Undergraduate Students allows parents to borrow money to cover costs not already covered by the student's financial aid package, up to the full cost of attendance.


Written contract or certificate of insurance.

Policy term

Period during which the policy provides coverage.


Person who has purchased an insurance policy.

Preferred Provider Organization (PPO)

Health insurance that combines some features of fee-for-service and some features of a health maintenance organization.

Preferred stock

Share in the ownership of a corporation that offers first rights to any dividends or a share of the assets if the corporation is liquidated.


Amount that an insured is charged, reflecting expectation of loss or risk.


Money value of a good or service.

Price discrimination

Practice of selling the same product for less to one buyer than to another.

Price effect

People buy less of something at higher prices than they do at lower prices.

Price stability

Absence of inflation or deflation; a period of time during which there is little change in what the dollar can buy.

Price system

Use of prices to allocate scarce resources. As people make exchanges, markets establish prices for goods, services, and resources.

Primary market

Market om which investment bankers sell new shares of corporate stock.


Face value of an obligation, such as a bond or a loan, that must be repaid at maturity.


What remains after the costs of doing business have been met. It is the difference between a firm?s total revenues and its total costs.

Profit sharing plan

Plan through an employer that offers pension benefits.

Profit-and-loss statement

Summary of a firm?s revenue, costs, and taxes over a period of time.

Progressive tax

Tax that takes a larger percentage of a higher income and a smaller percentage of a lower income.

Property damage liability

Coverage in the event that the negligent acts or omissions of an insured result in damage or destruction of another's property.

Property insurance

Insurance that covers financial losses caused by damages to home and property, including personal property.

Property taxes

Taxes on property, including real estate, boats, cars, recreational vehicles, and business inventories.

Proportional tax

Tax that takes the same percentage of all incomes.


Statement containing financial information published when a corporation is about to issue new securities.


Written authorization instructing others how to vote at a stockholders meeting.

Public utility

Privately owned firm that provides an essential public service and is subject to government regulation.

Purchasing power

A measure of the quantity and quality of goods and services one can buy with money; the value of money.

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There are no terms for the letter Q at this time.

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Rate of inflation

Annual percentage increase in the general level of prices.

Rate of return

Percentage of interest or dividends earned or paid on the principal of an investment.


Paid to a taxpayer by the IRS when withholding and estimated tax payments exceed tax for the year.

Regressive tax

Tax that takes a higher percentage of a low income and a lower percentage of a high income.


Return paid to those who supply land, a factor of production.

Rental insurance

Insurance policy in which all personal property is covered regardless of where the property is when the loss occurs.

Retained earnings

Undistributed profits; profits (less taxes) reinvested in the business for purchase of new capital resources.


Period of a person?s life during which he/she is no longer working, or the commencement of that period.


To produce or yield (profit or interest) as a payment for labor, investment or expenditure.


Sales income.

Right-to-work laws

State laws guaranteeing individuals the right to hold a job without being required to join a union.


Danger or probability of loss to an insurer or the amount that a company stands to lose; the variability of returns from an investment; the chance of nonpayment of a debt.

Risk management

Minimizes possible financial loss by identifying potential sources of loss, measuring the financial consequences of a loss, and creating a risk management plan for actual losses and their financial consequences.

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S corporation

Business that enjoys advantages of a corporation without corporate taxes.


Earnings of workers paid on a weekly or monthly basis.

Sales tax

Regressive tax added to the price of goods at the time they are sold.


Amount of money put aside for later use.

Savings account

Deposit account that pays interest, usually from day of deposit to day of withdrawal.

Savings bond

Bond that is issued by the United States government and is insured for the full investment and interest.


Financial aid awarded to a student for the purpose of attending an educational institution.

Secondary market

Stock market in which shares of previously-issued corporate stock are bought and sold.


Document that indicates ownership or creditorship; a stock certificate or bond.

Securities and Exchange Commission (SEC)

Federal agency responsible for protecting investors in the sale of securities.


Importance assigned to a worker?s length of service when it comes to questions of raises, layoffs, vacation, sick leave, etc.


How much more of a product buyers want to buy than sellers want to sell at a given price.

Social Security

Social welfare program in the U.S. that includes old-age and survivors insurance and some unemployment insurance and old-age assistance.

Social Security tax

Taxes that fund America?s government-run retirement plan.

Sole proprietorship

Business owned by one person.


Production of a limited variety of products by a business, region, or country.

Stafford Loan

Federal education loan issued by a participating lender.

Standard of living

Measure of the amount of goods and services available to citizens.

State disability income

State-established compensation plan for the support of employees unable to work due to an illness or injury.

State income tax

Money withheld from employee paychecks to pay state income taxes that fund state projects and services including schools, roads, and state police.

State Unemployment Income

Quarterly tax paid to a state employment agency.


Shares in the ownership of a corporation.

Stock market

General term for the organized trading of stocks through exchanges and over-the-counter.

Stock plan

Company stock purchase plan in which a participating employee can have a payroll deduction taken and applied to the stock purchase.


Owner of stock in a corporation.


Skill in managing or planning.

Structural unemployment

Unemployment resulting from changes in technology, consumer preference, or movement of jobs from one region to another.

Subsidized loan

A loan based on need, and the interest is paid by the federal government while the student is in school.


Financial aid, usually to a business.


Various amounts of something a producer is willing and able to sell at various possible prices at a particular time.


How much more of a product sellers want to sell than buyers want to buy at a given price. In budgeting, a surplus occurs when income exceeds expenditures.

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Payment to government.

Tax benefits

Tax deduction that is granted in order to encourage a particular activity (e.g. post-secondary education).

Tax credits

Amount of money that taxpayers can deduct directly from their taxes. Tax credits are available for purposes such as child care expenses and the earned income credit for low-income taxpayers.

Tax deductions

Amount that a person or business can subtract from their taxable income.

Tax exemptions

Part of the total income on which no tax is imposed.

Tax funded programs

Federal, state, or local programs and services provided to citizens; to which citizens contribute tax dollars.

Tax incidence

Final impact of a tax; who will really have to pay a tax.

Taxable income

Total of taxpayer's income reduced by allowable deductions.

Technical school

School of mechanical and industrial arts and the applied sciences.

Term insurance

Insurance coverage for a specific period of time.


Savings and loans, mutual savings banks, and credit unions.


Amount of income received directly from customers; more than $20 a month in tips must be reported to your employer.

Transaction fees

Fee for using a credit card or ATM card in certain circumstances.

Transfer payment

Payment that represents a redistribution of wealth?such as Social Security benefits, pensions, and welfare?rather than an exchange for goods or services.

Travelers? checks

Prepaid checks sold by certain banks and firms that may be replaced if lost or stolen.

Treasury bills

Securities of the federal government issued for terms of less than a year. The purchasers are lending money to the government.

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U. S. savings bonds

Small denomination certificates issued by the U.S. government for relatively long terms.

Unemployment rate

Percentage of those in the labor force, over the age of 16, actively seeking jobs but unable to find work.

Uninsured or Underinsured
motorist coverage

Pays for costs related to injuries or property damage caused by an uninsured, underinsured, or hit-and-run driver.

Union dues

Dues for membership in a labor union that may be deducted from an employee paycheck.

Union shop

Requires workers to join the union once they are hired.

Unit cost

Cost of producing one item, determined by dividing total costs by the number produced.

Universal life insurance

Flexible insurance plan that combines features of term and whole life.


Institution of higher learning that has teaching and research facilities constituting a graduate school and professional schools. Awards master?s and doctor?s degrees. An undergraduate division awards bachelor?s degrees.

Unlimited liability

Requirement that the owner or owners assume full responsibility for all losses or debts of a business.

Unsubsidized loan

Not based on need, and the borrower is responsible for the interest.

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Value-added tax (VAT)

Tax levied on the value added to goods at every stage of production.

Venture capital

Money made available for investment in innovative enterprises or research, especially in high technology, in which both the risk of loss and the potential for profit may be considerable.

Vertical equity

People in different income groups should pay different rates of taxes. Our current tax system is one of vertical equity.

Voluntary exchange

Process of trading that occurs in markets.

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Earnings of workers paid by the hour or unit of production.


Something that is not possessed, but is desired for use or pleasure.


Total value of one?s tangible assets.

Whole life insurance

Insurance plan with steady premiums and coverage and accumulating cash value.

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There are no terms for the letter X at this time.

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Actual amount of interest earned; depends on the rate of return and the frequency of compounding.

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There are no terms for the letter Z at this time.