Economics and Personal Finance Glossary (G-J)


Gainful employment- A job, especially one taken after graduation, that is suited to the ability and potentiality of the one employed.

Generally acceptable (money)- An item that people will take as payment for their work or as payment for goods and services.

General-purpose reloadable (GPR) prepaid card- A prepaid card that is branded as a “general-purpose” reloadable (GPR) card. A prepaid GPR card allows consumers to reload the card with additional funds and even set up direct deposits to the card.

Gini coefficient- A statistical measure of income inequality that ranges from 0 to 1. A Gini coefficient of 1 indicates perfect income inequality, where one person earns all the income and the rest of the population earns none. Conversely, a Gini coefficient of 0 indicates that total income is equally distributed among the entire population. A Gini coefficient, at a particular point in time, can be calculated graphically by finding the area between the line representing a country’s income distribution (known as the Lorenz curve) and a line of perfect income equality.

Gold standard- The ability to exchange dollars for gold at a fixed price.

Goods- Objects that satisfy people’s wants.

Government debt- The sum of accumulated budget deficits. Also known as national debt.

Government expenditures- Purchases of goods and services by government.

Government securities- Bonds, notes, and other debt instruments sold by a government to finance its expenditures.

Government securities auction- A sale of government securities in which competitive bidding determines their yield.

Government-sponsored enterprises (GSEs)- Enterprises that were established and chartered by the federal government for public policy purposes. GSEs include the Federal Home Loan Banks, the Agricultural Credit Bank and Farm Credit Banks, and the Federal Agricultural Mortgage Corporation. With the exception of Fannie Mae and Freddie Mac, which were taken into conservatorship by the federal government on September 7, 2008, GSEs are private companies and their securities are not backed by the full faith and credit of the federal government.

Gross domestic product (GDP)- The total market value, expressed in dollars, of all final goods and services produced in an economy in a given year.

Gross income- The total amount earned before any adjustments are subtracted.

Gross pay- The amount people earn per pay period before any deductions or taxes are paid.


Hedge fund- Although there is no precise legal definition, the term “hedge fund” generally refers to a pooled investment vehicle that is privately organized, administered by a professional investment manager, and not widely available to the public. The assets, investment strategies, and risk profiles of funds that meet this broad definition are quite diverse. In no sense are hedge funds an “asset class” such as stocks, bonds, commodities, or real estate. While some hedge funds pursue investment strategies similar to those pursued by private equity funds, the strategies of the sector as a whole are quite varied. Some hedge funds are highly leveraged, while many use little or no leverage.

Home Owners Equity Protection Act (HOEPA)- A 1994 amendment to HMDA that provides certain protections to mortgage borrowers. These include protecting consumers from unfair, abusive, or deceptive mortgage lending and servicing practices, ensuring that mortgage advertisements provide accurate and balanced information, and providing consumers with transaction-specific disclosures early enough to use while shopping for a mortgage.

Homeowner’s equity- The owner’s interest in a property, calculated as the current fair market value of the property less the amount of existing liens. The appraised, or carrying value, of a property minus the amount of existing liens.

Housing market- The market for buying homes. Housing is often an indicator of the overall health of the economy.

Human capital- The knowledge and skills that people obtain through education, experience, and training.

Human resources- The quantity and quality of human effort directed toward producing goods and services. Also known as labor.

Human resources (elementary)- People who do mental and/or physical work to produce goods and services.

Hyperinflation- A very rapid rise in the overall price level; an extremely high rate of inflation.


Identity theft- A form of stealing that results in someone gaining access to another person’s personal information (such as name, address, driver’s license number, credit card numbers, date of birth, birthplace, or Social Security number) to commit all or any of the following crimes: gaining access to bank accounts to steal money, making purchases with credit or debit cards, opening credit, or engaging in other criminal behavior.

Implicit cost- An indirect cost that does not require an outlay of money; it is measured by the value, in dollar terms, of forgone benefits.

Imports- Goods or services that are produced abroad but sold domestically.

Incentives- Perceived benefits that encourage certain behaviors.

Incentives (elementary)- Actions, awards, and rewards that determine the choices people make.

Income- The payment people receive for providing resources in the marketplace. When people work, they provide human resources (labor) and in exchange, they receive income in the form of wages or salaries. People also earn income in the forms of rent, profit, and interest.

Income (elementary)- Payment people earn for the work they do.

Income distribution- The way income is distributed among individuals in a society.

Income tax- Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Income taxes can be levied on both individuals (personal income taxes) and businesses (business and corporate income taxes).

Index fund- A mutual fund with the objective to match the composite investment performance of a large group of stocks or bonds such as those represented by the Standard and Poor’s 500 indexes.

Inefficiency- A condition that results when production of goods and services involves wasted resources or when it is possible to reallocate resources in a way that would generate greater consumer satisfaction.

Inelastic demand- The type of demand that exists when the percentage change in quantity demanded is less than the percentage change in price; that is, consumers are not very sensitive to a change in the price of a good or service.

Inflation- A general, sustained upward movement of prices for goods and services in an economy.

Inflation rate- The percentage increase in the average price level of goods and services over a period of time.

Infrastructure- Basic structures, including buildings and facilities such as roads, bridges, and waste disposal systems.

Initial Public Offering (IPO)- A company’s first sale of stock to the public.

Inputs- Materials and resources used to produce goods and services.

Institutions- A self-sustaining system of shared beliefs about how parties interact.

Interbank funding markets- In the United States, the market for bank reserves, which is an overnight loan of federal funds between depository institutions.

Interest- The price of using someone else’s money. When people place their money in a bank, the bank uses the money to make loans to others. In return, the bank pays interest to the account holder. Those who borrow from banks or other organizations pay interest for the use of the money borrowed.

Interest (elementary)- Money paid to customers for keeping their money at the bank.

Interest rate- The percentage of the amount of a loan that is charged for a loan. Also, the percentage paid on a savings account.

Interest rate effect- The effect on consumer spending and investment spending caused by a change in the aggregate price level on the purchasing power of consumers’ and firms’ money holdings.

Intermediary- One who stands between two parties to facilitate a transaction; a mediator.

Intermediate good- A man-made good that is used to produce another good or service, becoming part of that good or service.

Internal Revenue Service (IRS)- The federal agency that collects income taxes in the United States.

Internalizing the externality- Altering incentives so that individuals and firms incorporate the costs and benefits that have been shifted to third parties into their decisionmaking.

Inventory- Goods that have been produced but remain unsold.

Investment- The purchase of physical capital goods (e.g., buildings, tools, and equipment) that are used to produce goods and services.

Investment banker- Someone who works with a business to determine how much money should be raised to accomplish the goals of the business and the price and number of shares that should be sold to reach those financial goals.

Investment banking company- A firm that engages in the origination, underwriting, and marketing of new securities that are issued in the credit markets.

Investment in human capital- The efforts people put forth to acquire human capital. These efforts include education, experience, and training.

Investment-grade securities- Bonds that have been deemed to have a relatively low probability of default. These securities are generally rated Baa (or BBB) and above.

Investors- People of institutions who provide money or other assets to a company in return for possible financial gain in the future.

IRA (individual retirement account)- A retirement account that allows individuals to direct pretax or after-tax income, up to specific annual limits, toward investments that can grow.

Issuer- Any financial institution that issues or causes credit cards to be issued.


Jumbo loan- A loan that exceeds the mortgage amount eligible for purchase by Fannie Mae or Freddie Mac. Also called a “nonconforming loan.”