Chapter 19 - Personal Finances

Question 1

currency

Answer 1

coins and paper money

Question 2

long-term credit

Answer 2

an advance of money to be repaid in installments over a long period of time

Question 3

short-term credit

Answer 3

an advance of money to be repaid within a short period of time

Question 4

bankruptcy

Answer 4

a legal declaration that a person or business cannot pay his or her or its debts

Question 5

creditors

Answer 5

people who are owed money

Question 6

collateral

Answer 6

property used to guarantee that a loan will be repaid

Question 7

savings and loan associations

Answer 7

banks originally established to help people buy homes

Question 8

Federal Reserve System

Answer 8

the US banking system that handles the baking needs of the federal government and regulated the money supply

Question 9

discount rate

Answer 9

the rate of interest charged by Federal Reserve Banks on loans to member banks

Question 10

discounting

Answer 10

the practice of deducting interest on a loan before money is given to the borrower

Question 11

credit unions

Answer 11

banks that are operated by their members to create a pool of money for low-interest loans

Question 12

certificates of deposits (CDs)

Answer 12

investments in which an amount of money invested for a specified period of time earns a guaranteed rate of interest

Question 13

brokers

Answer 13

brokerage house employees who but and sell stock

Question 14

stock exchange

Answer 14

a market where stocks are bought and sold

Question 15

mutual funds

Answer 15

investments that reduce risk to shareholders by investing in many different stocks

Question 16

money market funds

Answer 16

investments that are similar to a mutual fund but do not guarantee a specified amount of interest and are not insured by the government

Question 17

insurance

Answer 17

a system of protection in which people pay small sums periodically to avoid the risk of a large loss

Question 18

premium

Answer 18

a payment made for insurance protection

Question 19

private insurance

Answer 19

insurance individuals and companies voluntarily pay to cover unexpected losses

Question 20

beneficiary

Answer 20

the person named in an insurance policy to receive the amount of the policy when the policyholder dies

Question 21

social insurance

Answer 21

government programs that are meant to protect individuals from future hardship and that individuals and businesses are required to pay for by state and federal laws

Question 22

Social Security

Answer 22

a system of government insurance that provides benefits for retired people, people with disabilities, unemployed people, and people with job-related injuries and illnesses

Question 23

Medicare

Answer 23

a federal program of health insurance for people age 65 or older

Question 24

Medicaid

Answer 24

a federal program that helps the states pay the medical costs of low-income people