Unit 2 review: Income and careers

Question 1

tax

Answer 1

Money collected by a
government from its citizens for
the purpose of operating the
government.

Question 2

payroll taxes

Answer 2

Federal and state
taxes withheld from a person’s
paycheck and sent to the
government by his employer.

Question 3

tax return

Answer 3

A formal report
to the IRS that contains all the
information relative to a person’s
income taxes for a specific year.

Question 4

gross income

Answer 4

Total amount of
a person’s income from (almost)
any source.

Question 5

capital gains

Answer 5

A taxable gain
that occurs when you sell an
asset for more than what you
paid for it.

Question 6

adjusted gross income

Answer 6

Income calculated by taking
total income and subtracting
allowable amounts that
include contributions to certain
retirement accounts, alimony
payments, interest paid on
student loans, and other
expenditures that are identified
by the IRS.

Question 7

standard deduction

Answer 7

Fixed
amount all people are allowed to
deduct from their AGI to reduce
their tax liability.

Question 8

itemized deductions

Answer 8

Specific
expenses that, under tax law,
can be deducted from income
to reduce the amount of income
subject to income tax.

Question 9

Accreditation

Answer 9

An official recognition that a school or program
meets a certain standard.

Question 10

Apprenticeship

Answer 10

On-the-job program in which a person may receive formal training.

Question 11

Baby boom

Answer 11

A period of very high birthrates that occurred between 1946 and 1964.

Question 12

beneficiary

Answer 12

A person who receives payment from a life insurance provider when the policyholder dies.

Question 13

business cycle

Answer 13

The economic pattern of alternating periods of shrinking and expanding.

Question 14

certification

Answer 14

An official document or record that states that a person has met some standard for training or knowledge.

Question 15

COBRA

Answer 15

The Consolidated Omnibus Budget Reconciliation Act. It allows an individual temporarily to continue health insurance coverage at group rates.

Question 16

Co-insurance

Answer 16

The share of costs for covered insurance services that an individual is required to pay out of pocket. Often called a co-pay.

Question 17

Compensation

Answer 17

Money earned and benefits given by employers

Question 18

Consumer price index

Answer 18

The formal measure of prices used
to calculate inflation that tells us whether things overall are more expensive now than in the past.

Question 19

Demographics

Answer 19

statistical data relating to the population and particular groups within it.

Question 20

Deductible

Answer 20

The amount of money that a policyholder must pay before an insurance policy will begin to cover a claim.

Question 21

Disability insurance

Answer 21

Insures the beneficiary’s earned income against the risk that sickness or injury will make working (and therefore earning) impossible.

Question 22

economic depression

Answer 22

A severe recession.

Question 23

economics

Answer 23

The study of the production, distribution, and consumption of goods and services. Economists seek to understand ways that individuals and businesses make decisions, the factors that influence their choices, and the impact these
decisions have on others.

Question 24

economy

Answer 24

The system related to the production, distribution, exchange, and consumption of goods and services in which individuals, businesses, governments, and the world as a
whole interact.

Question 25

fraud

Answer 25

Occurs when someone submits false information to get a financial benefit.

Question 26

global economy

Answer 26

The world in which economies of all countries interact and depend on each other.

Question 27

gross domestic product

Answer 27

The total dollar amount of all final goods and services purchased domestically in a given year.

Question 28

gross pay

Answer 28

Hourly wage multiplied by hours worked.

Question 29

group plan

Answer 29

Insurance plans that cover a large group of individuals, such as employees of a particular company or local government. Within a group plan, an individual’s high risk or loss is spread across the entire pool of group members.

Question 30

Health insurance

Answer 30

Provides payment to people who suffer a financial loss as a result of illness or injury.

Question 31

HIPAA

Answer 31

The Health Insurance Portability and Accounting Act ensures that workers can continue their health insurance coverage if they switch jobs. The act prohibits insurance companies from denying new employees access to coverage based on their health or preexisting conditions.

Question 32

Inflation

Answer 32

A sustained increase in the general level of prices. During a time of inflation, most things become more expensive and the purchasing power of money decreases.

Question 33

Insurance

Answer 33

A financial product that when purchased provides reimbursement paid to a person in the event of certain types of financial loss.

Question 34

Internal revenue service

Answer 34

A branch of the U.S. Treasury Department that carries out the federal tax system.

Question 35

internship

Answer 35

A temporary, short-term position designed to provide exposure to and training for a particular job.

Question 36

Liability

Answer 36

What is owed (debt).

Question 37

Life insurance

Answer 37

Provides payment to a specific person or persons when the policyholder dies.

Question 38

Macroeconomics

Answer 38

The study of broad economic issues that impact the economy as a whole.

Question 39

Medicaid

Answer 39

A government-sponsored program that provides health insurance for low-income individuals.

Question 40

Madicare

Answer 40

Funded by payroll taxes. Provides health care cover-age to older Americans and some younger disabled people.

Question 41

microeconomics

Answer 41

The study of individual choices or decisions made by smaller units, such as a firm.

Question 42

Personal income tax

Answer 42

A tax levied on the financial income of individuals.

Question 43

Policyholder

Answer 43

A person who buys a health insurance policy or subscribes to it through an employer.

Question 44

Pre existing condition

Answer 44

A health condition that existed before an individual’s policy was granted.

Question 45

prenium

Answer 45

Regular payments paid to an insurance company in return for coverage.

Question 46

Recession

Answer 46

A period of time in which the economy is shrinking.

Question 47

resume

Answer 47

A snapshot of an individual’s qualifications including background, education, and previous work history.

Question 47

social security

Answer 47

Funded by payroll taxes. It provides payments to eligible retirees and disabled people.

Question 48

sales tax

Answer 48

Tax collected by a merchant when a purchase is made and then sent to the government.

Question 49

take home pay

Answer 49

Wages that remain after taxes are withheld (net pay).

Question 50

term insurance

Answer 50

Life insurance provided over a specific period of time.

Question 51

universal life insuranse

Answer 51

Provides coverage for a specified term and builds savings for the policyholder.

Question 52

whole life insurance

Answer 52

Provides coverage for as long as the policy-holder continues to pay the premium.