Chapter 1: Personal Financial Overview - Test Review Flashcards Preview

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Flashcards in Chapter 1: Personal Financial Overview - Test Review Deck (56)
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1

Financial Planning

Helps you reach important goals and financial security over your lifetime

2

Helps you reach important goals and financial security over your lifetime

Financial Planning

3

The ability to meet essential needs without taking on more debt than you can repay

Financial Security

4

Possessing and applying financial knowledge to make informed and responsible financial choices

Financial Literacy

5

Using your resources to achieve predetermined objectives

Management

6

Tangible items that can be purchased

Goods

7

Intangible activities that another person usually performs for a fee

Services

8

Things that are considered necessities

Needs

9

Things you would like but they are not essential

Wants

10

Your beliefs about what is important and desirable

Values

11

The overall structure of values and goals that guides your behavior

Value System

12

The moral principles or beliefs that direct a person’s behavior

Ethics

13

An objective you want to attain

Goal

14

A value or goal that is given more importance than other values and goals

Priority

15

An established measure of quality, value, or quantity

Standard

16

Tools you can use to reach goals

Resources

17

Weighing the costs against the benefits of an action, purchase or financial decision

Cost-benefit analysis

18

The change in total benefit of using one additional unit

Marginal benefit

19

The change in total cost of using one more unit

Marginal cost

20

The choice you give up when you make one choice over another

Trade-off

21

The value of the option you gave up

Opportunity cost

22

A process of choosing a course of action after evaluating information and the costs and benefits of alternative actions

Systematic decision-making

23

The state of the economy at a given time

Economic conditions

24

Period of slow or no economic growth

Recession

25

Period of rising prices

Inflation

26

The statistical characteristics of the population

Demographics

27

The beliefs, behaviors, and other characteristics common among members of a group or society

Culture

28

The application of science and research to human life and environment

Technology

29

Refers to worldwide markets, links and communications

Globalization

30

Examples of needs

Food, clothing, shelter

31

Be able to give examples of unethical behavior

1 example: Lying to your boss about why you were out sick

32

Be able to give examples of To Be goals

Example: To be a teacher, to be happy

33

Be able to give examples of To Do goals

Examples: To go to a concert, to exercise everyday

34

Be able to give examples to To Have goals

Examples: To have the latest iphone, to have lots of money

35

The marginal benefit of using each additional unit of something tends to decrease as the quantity used

Increases

36

Be able to identify examples of a trade-off

Example: If you buy a new cell phone, the trade-off is the other ways you could have used that money

37

Identify the 5 steps of the systematic decision-making process

1. Define the decision to be made

38

What are the 3 parts of the management process

1. Planning

39

During inflation prices go up while the value of the dollar

goes down

40

What are examples of (demographic) vital statistics

births, deaths, marriages

41

What are examples of (demographic) social statistics

age, sex, race, geographic distributions and growth rates

42

What are examples of (demographic) social -economic statistics

education levels, income levels, employment, religion

43

What are ways that outsourcing affects the economy

lower incomes for workers, loss of jobs for workers

44

Examples of government entitlements are:

Medicaid, Medicare, Social Security

45

Keeps you focused on the final goal

Determination

46

Helps you adjust to new and unexpected situations

Flexibility

47

Financial security is the ability to purchase everything you

Need

48

Goals are closely related to

Values

49

You should be able to _____________ progress toward achieving a goal

Measure

50

Your possessions can be ___________ that help you achieve a goal

resources

51

The panning phase of management involves:

1. identifying goals

52

____________ can be touched, used, and purchases

Goods

53

Long term goals may take

3 or more years

54

Medium term goals may take

1 - 3 years

55

Short terms goals may take

under 1 year

56

During a recession, consumers tend to spend ___________ money

less