vocab unit 5

Question 1

An economy based on the direct trade of goods and services.

Answer 1

Barter economy

Question 2

Money that has value because the item used as money has an intrinsic value.

Answer 2

commodity money

Question 3

Money that has value simply because some government, institution or business says that it does.

Answer 3

fiat money

Question 4

An item that is acceptable as payment in the trade of a good or service.

Answer 4

medium of exchange

Question 5

An item that is used to compare the monetary worth of different goods and services.

Answer 5

standard of value

Question 6

An item that retains its monetary worth over time.

Answer 6

store of value

Question 7

Bank accounts that allow the owner easy access to the held money.

Answer 7

demand deposit accounts

Question 8

A representative currency whose value is back by gold held by the country.

Answer 8

gold standard

Question 9

The agency responsible for insuring the deposits within American banks.

Answer 9

FDIC

Question 10

Bank accounts that give the customer interest on the money deposited.

Answer 10

savings

Question 11

A type of time deposit giving guaranteed interest over a fixed amount of time, with penalties for early withdrawal.

Answer 11

certificate of deposit

Question 12

An institution that offers banking services but is owned by those that have deposited money within it.

Answer 12

credit union

Question 13

Putting money in a variety of investments to decrease risk.

Answer 13

diversification

Question 14

The idea that investments have no guarantee, and that the investor may lose money.

Answer 14

risk

Question 15

An investment with a government or business that has a guaranteed payment over a set amount of time.

Answer 15

bond

Question 16

A bond sold by a city or county government.

Answer 16

municipal bonds

Question 17

A bond issued by a bank to its customers.

Answer 17

savings bonds

Question 18

A savings plan that gives the owner the ability to avoid or delay taxes on the money held in it.

Answer 18

IRA

Question 19

An investment portfolio that gives the owner a proportional share of a larger investment in a variety of stocks, bonds, and other investments.

Answer 19

mutual fund

Question 20

A plan put in place by a business to help its employees save and plan for retirement.

Answer 20

401K

Question 21

The amount you are going to have to pay for taking out a loan.

Answer 21

interest

Question 22

The percentage of the amount borrowed that you will be charged for taking out a loan.

Answer 22

interest rate

Question 23

A traditional loan in which the borrower pays back the amount owed over a preset period of time. Also called a bank loan.

Answer 23

installment loan

Question 24

A loan in which the borrower is allowed to continually borrow and payback money up to a preset limit. Also called a credit card loan.

Answer 24

revolving loan

Question 25

A loan in which the borrower uses something of value that they own as collateral.

Answer 25

title loan

Question 26

A short term loan which is typically intended to be paid off on your next payday.

Answer 26

payday loan

Question 27

An item of value that is pledged to loan as security against default.

Answer 27

collateral

Question 28

A person or business who is owed money.

Answer 28

creditor

Question 29

Failure to pay back a loan.

Answer 29

default

Question 30

When the exchange rate between two countries’ currencies is held constant and not allowed to fluctuate.

Answer 30

fixed rate mortgage

Question 31

A home loan in which the interest can will change over time.

Answer 31

adjustable rate mortgage

Question 32

The monthly payment a customer makes to maintain their insurance.

Answer 32

premium

Question 33

The amount of money a customer must pay before the insurance company will pay.

Answer 33

deductible