Federal Budget Glossary Annual Percentage Rate (APR)

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In 2013, Congress continues to struggle to resolve ongoing Federal Budget issues, constantly creating headlines in the news. What does it all mean? .

Adjusted Gross Income: Amount of income subject to federal income tax. In addition to any other tax credits, contributions to IRAs and 401(k) plans are subtracted from the total.

Annual Percentage Rate (APR): A standardized method of calculating interest rates. It permits the comparison of different interest rates just as unit pricing enables comparison shopping at the supermarket.

Austerity: A policy used to reduce budget deficits during adverse economic conditions by governments. The policy could include spending cuts and/or tax increases.

Bond: A long-term promissory note that obligates the borrower to make specified payments over a specific period of time. Bonds vary widely in maturity, security and type of issuer, although most are sold in $1,000 denominations.

Bull Market: An extended period of general price increases in the securities market.