Health Economics and Financing (5th Edition, by Thomas E. Getzen) Chapter 1 - 18 -
Complete Test Bank
bond - (answer)This is a contract to repay borrowed money, often issued by a company. This issues
financial security for a debt.
compound interest - (answer)This is a method of calculating interest in which the interest is added to
the principal each period so that the principal continues to grow throughout the life of the loan or
investment. The formula is A = C * (1 + r/100)n where A is the future value, C is the principal, r is the
interest rate per period, and n is the number of periods.
current yield - (answer)The annual interest rate paid by a bond. It does not reflect the interest rate paid
over the life of the bond.
disability insurance - (answer)A type of insurance paid to an individual if he/she is injured and is unable
to work for a specified length of time.
earnings - (answer)This is a payment usually of money for labor or services usually according to contract
and on an hourly basis.
excise tax - (answer)This is a tax on production, transportation, sale or consumption of a certain good or
service.
incentive - (answer)Any factor, usually financial, to influence once choice over another by an individual
or business.
income tax - (answer)This is a tax levied on net personal or business income.
inflation - (answer)a rise in the general level of prices
insurance - (answer)A form of risk management purchased by a business or individual against a possible
financial loss paid in the form of a monthly or annual premium.
Complete Test Bank
bond - (answer)This is a contract to repay borrowed money, often issued by a company. This issues
financial security for a debt.
compound interest - (answer)This is a method of calculating interest in which the interest is added to
the principal each period so that the principal continues to grow throughout the life of the loan or
investment. The formula is A = C * (1 + r/100)n where A is the future value, C is the principal, r is the
interest rate per period, and n is the number of periods.
current yield - (answer)The annual interest rate paid by a bond. It does not reflect the interest rate paid
over the life of the bond.
disability insurance - (answer)A type of insurance paid to an individual if he/she is injured and is unable
to work for a specified length of time.
earnings - (answer)This is a payment usually of money for labor or services usually according to contract
and on an hourly basis.
excise tax - (answer)This is a tax on production, transportation, sale or consumption of a certain good or
service.
incentive - (answer)Any factor, usually financial, to influence once choice over another by an individual
or business.
income tax - (answer)This is a tax levied on net personal or business income.
inflation - (answer)a rise in the general level of prices
insurance - (answer)A form of risk management purchased by a business or individual against a possible
financial loss paid in the form of a monthly or annual premium.
