Economics Chapter 4

  1. credit
    receipt of money either directly or indirectly to buy goods and services in the present with the promise to pay for them in the future
  2. principal
    amount of money originally borrowed in a loan
  3. interest
    amount of money the borrower must pay for the use of someone else's money
  4. installment debt
    type of loan repaid withe equal payments, or installments , over a specific period of time
  5. durable goods
    manufactured items that have a life span longer than three years
  6. mortgage
    installment debt owned on houses, buildings, or land
  7. commercial bank
    bank whose main functions are to accept deposits, lend money, and transfer funds among banks, individuals, and businesses
  8. savings and loan association (S&L)
    depository institution that accepts deposits and lents money
  9. savings bank
    depository institution originally set up to serve small savers overlooked my commercial banks
  10. credit union
    • depository institution owned and operated by its members to provide savings accounts and
    • low-interest loans only to its members
  11. finance company
    company that takes over contracts for installment debts from stores and adds a fee for collecting the debt; a consumer finance company makes loans directly to consumers at high rates of interest
  12. charge account
    credit extended to a consumer allowing the consumer to buy goods or services from a particular company and to pay for them later
  13. credit card
    credit device that allows a person to make purchases at many kind of stores, restaurants, and other businesses without paying cash
  14. finance charge
    cost of credit expressed monthly in dollars and cents
  15. annual percentage rate (APR)
    cost of credit expressed as a yearly percentage
  16. credit bureau
    private business that investigates a person to determine the risk involved in lending money to that person
  17. credit check
    investigation of a person's income, current debts, personal life, and past history of borrowing and repaying debts
  18. credit rating
    rating of the risk involved in lending money to a specific person or business
  19. collateral
    something of value that a borrower lets the lender claim if a loan is not repaid
  20. secured loan
    loan that is backed up by collateral
  21. unsecured loan
    loan guaranteed only by a promise to repay it
  22. usury law
    law restricting the amount of interest that can be charged for credit
  23. bankruptcy
    the inability to pay debts based on the income recieved
Card Set
Economics Chapter 4
Terms for my high school economics class, chapter four