5.2 Flashcard Quiz 156 - 167

Represent partial ownership in a company (shares). Buying these in a company allows you to make a profit if the business does well and the value of the increases.

• Stocks

• Banks

• Investments

• Credit

Offered by the US government to investors with the promise of the investment being repaid with interest. Low rate of return and carries inflation risk.

• Progressive tax

• Bonds

• Property tax

• Fixed rate

A collection of various investments (stocks, bonds, securities). Provide more protection against loss because the investment is spread across many different companies rather than just one company.

• Regressive tax

• Inflation rate

• Mutual fund

• Shared liability

Hurts lenders who lend at fixed rates. Helps borrowers who borrow at fixed rates because interest rates remain stable as prices rise, and they pay back their loans with money that has less purchasing power than the money they borrowed.

• Unanticipated inflation

• Progressive tax

• Renters insurance

• Retirement account

The government taxes our wages in these ways: Progressive Tax, Regressive Tax, and Proportional Tax. These are types of what kind of taxes?

• Income

• Federal

• Local

• State

Tax rate increases as income increases. The wealthy pay a higher percentage of their earnings than the poor. (U.S. Income tax)

• Stock tax

• Bond tax

• Progressive tax

• Regressive tax

The tax rate decreases as income increases. People pay the same amount (not percent!) of tax regardless of income.

• Regressive tax

• Income tax

• Progressive tax

• Property tax

Also known as a flat tax. Everyone pays the same percentage of their income. (Ex. Social security) Percentage does not change with respect to changes in income.

• Sales tax

• Mutual tax

• Property tax

• Proportional tax

Taxation of the value of real property (buildings and land). Levied by local governments, like counties or cities.

• Property tax

• Annual tax

• Regressive tax

• Lottery tax

Likelihood of a borrower to repay—based on factors such as history of repayment, credit score, and current debt. Based on the “3 Cs” of Credit

• Income repayment loan

• Credit worthiness

• Variable rate

• Unanticipated inflation