Finance and Business- Chapter 1
____________________________ are purchases that you make often and use up quickly.
Consumable goods
A set of federal laws that allow you to either restructure your debts or remove certain debts. _____
Bankruptcy
At an annual inflation rate of 6%, how long will it take for the means prices to double?
12 years
The financial planning process has 6 specific steps. Step number ___ is to identify alternative courses of action.
3
What does the A in SMART stand for?
Action
_______ is the study of the decisions that go into making, distributing, and using goods and services.
Economics
True or False: Developing and using a budget is part of the obtaining component of financial planning
False
True or False: Developing financial goals is the first step in the financial planning process
False
True or False: Economics is the study of using money to achieve financial goals
False
True or False: Financial planning has specific teach issues that will be effective for every individual
False
True or False: Increased demand for a product or service will usually result in lower prices for the item
False
True or False: Interest on savings is calculated by multiplying the money amount times the opportunity cost times the annual interest rate
False
True or False: Time value of money refers to the changes in consumer spending when inflation occurs
False
True or False: higher inflation results in lower interest rates
False
True or False: lenders benefit more than the borrowers
False
Principal X annual interest rate X time period = _________
Interest rate
What does the M in SMART stand for?
Measurable
What does the R in SMART stand for?
Realistic
Financial goals should take the SMART approach where S stands for ______
Specific
What does the T in SMART stand for?
Time
The difference between a country's export and its imports is called ___________
Trade balance
True or False: A decrease in the demand for a product or service may result in a decrease in wages
True
True or False: A decrease in the demand for a product or service may result in a decrease in wages for people producing that item
True
True or False: A financial plan is another name for a budget
True
True or False: Analyzing your current financial position is part of the first stage of the financial process.
True
True or False: Inflation reduces the buying power of money
True
True or False: Opportunity costs refer to time, money and other resources that are given up when a decision is made
True
True or False: Opportunity costs refer to what a person gives up when making a decision
True
True or False: Trade balance is defined as the different between a country's exports and its imports
True
True or False: present value is also referred to as compound values
True
True or False: risks associated with most financial decisions are fairly easy to measure
True
Ideas and principles that a person considers correct, desirable, and important are called ______
Values
The stages in the family situation and financial needs of an adult is called ___________________
adult life cycle
A ________ is a person who purchases and uses goods or services
consumer
The first step of developing a personal financial plan is ____________________________
determining your current financial situation
When penny went to the bank there was a sign that says FDIC what does that mean and what is the cap of money?
federal deposit of insurance corporation and $250,000
The amount that your original deposit will be worth in the future based on earning a specific interest rate over a specific period of time, is its __________
future value
Setting a college education, buying a car, and starting a business are examples of _____.
goals
The ability to readily convert financial resources into cash without a less in value is called ______
liquidity
All of the following are important factors that influence your day to day decisions about finances EXCEPT _______
location
Saving money to buy a house in ten years and putting money away for retirement are examples of __________
long term goals
What a person gives up by making a chance is called ________
opportunity cost
In order to calculate the time value of your savings, you need to know the annual interest rate, the length of time your money will be in an account, and the ______
principal
Your financial goals should be all of the following EXCEPT ______
unclear