Chapter 1: Personal Financial Overview - Test Review

Question 1

Financial Planning

Answer 1

Helps you reach important goals and financial security over your lifetime

Question 2

Helps you reach important goals and financial security over your lifetime

Answer 2

Financial Planning

Question 3

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

Answer 3

Financial Security

Question 4

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

Answer 4

Financial Literacy

Question 5

Using your resources to achieve predetermined objectives

Answer 5

Management

Question 6

Tangible items that can be purchased

Answer 6

Goods

Question 7

Intangible activities that another person usually performs for a fee

Answer 7

Services

Question 8

Things that are considered necessities

Answer 8

Needs

Question 9

Things you would like but they are not essential

Answer 9

Wants

Question 10

Your beliefs about what is important and desirable

Answer 10

Values

Question 11

The overall structure of values and goals that guides your behavior

Answer 11

Value System

Question 12

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

Answer 12

Ethics

Question 13

An objective you want to attain

Answer 13

Goal

Question 14

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

Answer 14

Priority

Question 15

An established measure of quality, value, or quantity

Answer 15

Standard

Question 16

Tools you can use to reach goals

Answer 16

Resources

Question 17

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

Answer 17

Cost-benefit analysis

Question 18

The change in total benefit of using one additional unit

Answer 18

Marginal benefit

Question 19

The change in total cost of using one more unit

Answer 19

Marginal cost

Question 20

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

Answer 20

Trade-off

Question 21

The value of the option you gave up

Answer 21

Opportunity cost

Question 22

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

Answer 22

Systematic decision-making

Question 23

The state of the economy at a given time

Answer 23

Economic conditions

Question 24

Period of slow or no economic growth

Answer 24

Recession

Question 25

Period of rising prices

Answer 25

Inflation

Question 26

The statistical characteristics of the population

Answer 26

Demographics

Question 27

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

Answer 27

Culture

Question 28

The application of science and research to human life and environment

Answer 28

Technology

Question 29

Refers to worldwide markets, links and communications

Answer 29

Globalization

Question 30

Examples of needs

Answer 30

Food, clothing, shelter

Question 31

Be able to give examples of unethical behavior

Answer 31

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

Question 32

Be able to give examples of To Be goals

Answer 32

Example: To be a teacher, to be happy

Question 33

Be able to give examples of To Do goals

Answer 33

Examples: To go to a concert, to exercise everyday

Question 34

Be able to give examples to To Have goals

Answer 34

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

Question 35

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

Answer 35

Increases

Question 36

Be able to identify examples of a trade-off

Answer 36

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

Question 37

Identify the 5 steps of the systematic decision-making process

Answer 37

1. Define the decision to be made

Question 38

What are the 3 parts of the management process

Answer 38

1. Planning

Question 39

During inflation prices go up while the value of the dollar

Answer 39

goes down

Question 40

What are examples of (demographic) vital statistics

Answer 40

births, deaths, marriages

Question 41

What are examples of (demographic) social statistics

Answer 41

age, sex, race, geographic distributions and growth rates

Question 42

What are examples of (demographic) social -economic statistics

Answer 42

education levels, income levels, employment, religion

Question 43

What are ways that outsourcing affects the economy

Answer 43

lower incomes for workers, loss of jobs for workers

Question 44

Examples of government entitlements are:

Answer 44

Medicaid, Medicare, Social Security

Question 45

Keeps you focused on the final goal

Answer 45

Determination

Question 46

Helps you adjust to new and unexpected situations

Answer 46

Flexibility

Question 47

Financial security is the ability to purchase everything you

Answer 47

Need

Question 48

Goals are closely related to

Answer 48

Values

Question 49

You should be able to _____________ progress toward achieving a goal

Answer 49

Measure

Question 50

Your possessions can be ___________ that help you achieve a goal

Answer 50

resources

Question 51

The panning phase of management involves:

Answer 51

1. identifying goals

Question 52

____________ can be touched, used, and purchases

Answer 52

Goods

Question 53

Long term goals may take

Answer 53

3 or more years

Question 54

Medium term goals may take

Answer 54

1 - 3 years

Question 55

Short terms goals may take

Answer 55

under 1 year

Question 56

During a recession, consumers tend to spend ___________ money

Answer 56

less