A regular payment, often at monthly or biweekly intervals, made by an employer to an employee, especially in the case of professional or white-collar employees. Salaries are paid for services rendered and are not based on hours worked.
An exchange of goods or services for money.
The money a business receives from customers who buy its goods and services. Not to be confused with profit.
Tax in the form of a percent of the cost of a good or service; paid to local and state governments when goods and services are purchased.
To keep money for future use; to divert money from current spending to a savings account or another form of investment.
Money set aside for a future use that is held in easily-accessed accounts, such as savings accounts and certificates of deposit (CDs).
An interest-bearing account (passbook or statement) at a financial institution.
Securities issued by the U.S. Treasury in relatively small denominations for individual investors. Investors who buy savings bonds in effect make a loan to the government, in return for the government's promise (represented by the bond, a nontransferable debt certificate) to repay the loan with interest. The interest is free from state and local taxation. Savings bonds are considered to be risk-free investments, since they are backed by the U.S. government.
Arrangements by means of which people save money, including savings accounts, certificates of deposit (CDs), money market deposit accounts and U.S. Savings Bonds.
A plan for setting aside money for future use.
Guidelines for workplace success developed by the U.S. Department of Labor Secretary's Commission on Achieving Necessary Skills in 1992. The Commission determined that success in any occupation requires basic skills (reading, writing and math), thinking skills, personal qualities, interpersonal skills and the ability to acquire and use resources, information systems and technology.
The condition that exists because human wants exceed the capacity of available resources to satisfy those wants; also a situation in which a resource has more than one valuable use. The problem of scarcity faces all individuals and organizations, including firms and government agencies.
Effects indirectly related to a course of action whose influence will only be seen or felt later in time.
A market in which stocks can be bought and sold once they are approved for public sale; for example, the New York Stock Exchange.
Credit with collateral (for example, a house or a car) for the lender.
A fee charged by a financial institution for certain financial services provided to customers.
Activities performed by people, firms or government agencies to satisfy economic wants.
A property of a good or service such that it can be used by many without diminishing another's ability to consume the same good; examples include street lights and radio broadcasts.
A period of time long enough for existing firms to change some--but not all--of the resources they use.
Something a person or organization plans to achieve within a one-year time period.
The situation that results when the quantity demanded for a product exceeds the quantity supplied. Generally happens because the price of the product is below the market equilibrium price.
A document bearing a person's signature, held on file in a financial institution. In cases of suspected forgery, signatures of doubtful origin can be checked against those recorded on signature cards.
Interest paid on the initial investment (the principal) only. Calculated by multiplying the investment principal times the annual rate of return times the number of years involved.
Simplified Employee Pension (SEP) Plan
A qualified, tax-deferred retirement plan for an individual with a small business.
A federal system of old-age, survivors', disability and hospital care (Medicare) insurance which requires employers to withhold (or transfer) wages from employees' paychecks and deposit that money in designated accounts.
Social Security Tax
A tax levied on employers and employees to finance public Social Security benefits.
A business owned by one person who receives all the profits and is responsible for all the debts incurred by the business.
Special Interest Group
An organization of people with a particular legislative concern. They work together to gather information, lobby politicians and publicize their concern.
A situation in which people produce a narrower range of goods and services than they consume. Specialization increases productivity; it also requires trade and increases interdependence.
Use money now to buy goods and services.
A record of spending over a period of time.
A beneficial or positive side effect that results when the production or consumption of a good or service affects the welfare of people who are not the parties directly involved in a market exchange. Sometimes referred to as "third-party benefit" or "positive externality."
A negative side effect that results when the production or consumption of a good or service affects the welfare of people who are not the parties directly involved in a market exchange. Sometimes called "third-party cost" or "negative externality."
Standard of Living
The level of subsistence of a nation, social class or individual with reference to the adequacy of necessities and comforts of daily life.
State Income Tax
A percentage of income paid by individuals and businesses to a state government to fund services such as roads, safety and health. Not all states levy an income tax.
Statement Closing Date
In a credit arrangement, the date of the last purchase billed on the statement.
Statement Savings Account
A savings account for which the bank sends a statement detailing deposits, withdrawals and interest earned once a month or once a quarter. Interest rates for statement accounts are usually lower than rates for other savings instruments, but a depositor can open a statement account with very little money and can also withdraw money from a statement account at any time.
An ownership share or shares of ownership in a corporation.
A market in which the public trades stock that someone already owns; the buying and selling of stock.
Stock Mutual Fund
A mutual fund that buys stocks in order to make profits for the investors.
The type of unemployment resulting from people's present abilities, skills, training and location not matching up with available job openings that reflect the basic structure of the economy.
Substitute Goods and Services
Goods or services that may be used in place of another good or service; examples include tap water for bottled water (or vice versa) and movies for concerts (or vice versa).
The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.
Supply-Side Fiscal Policy
Policy intended to increase an economy's productive capacity by shifting aggregate supply; e.g., a tax cut giving businesses an incentive to invest and expand.
The situation that results when the quantity supplied of a product exceeds the quantity demanded. Generally happens because the price of the product is above the market equilibrium price.