Financial Literacy 6-10
The average individual debt for today's young adults is __________.
$45,000
How much does this article suggest is the ideal amount to save from each paycheck?
10 percent
Who said the quote, "Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike"?
Alexander Hamilton
Which of the following characteristics applies to the financial career of accountant? (Select all that apply.)
An accountant is a qualified professional. An accountant deals with financial records and reports.
Which of the following is a tip for managing your money? (Select all that apply.)
Don't spend money you don't have. Be deliberate about your spending and saving. Ask if each purchase is a need or a want.
What was currency like in the United States before Congress created national banks and a national system of currency in 1863?
Each state had its own currency.
Which of the following is NOT a tip you should follow when setting long-term financial goals?
Evaluate your everyday spending habits and think of ways to save money.
How did Alexander Hamilton die?
He was killed in a duel by one of his enemies.
Which of the following is NOT an item on the checklist for evaluating a potential investment opportunity?
Invest outside of the country whenever possible.
Which of the following is a true statement about investing? (Select all that apply.)
It is important for everyone to set an investment objective. Long-term investments are useful for saving for retirement. Personal investing is saving money.
Which of the following should be a characteristic of a financial plan? (Select all that apply.)
It should have long-term goals. It should be written. It should have short-term goals.
What are the three categories that the video recommends dividing your expenses into?
Must Haves, Wants, and Savings & Debt
Which of the following is NOT something you should do when evaluating a potential investment opportunity?
Search for risk-free investments
Which of the following is a checklist item for evaluating sources? (Select all that apply.)
The information is from a reliable source. The author's purpose for writing is clear, and you can tell if there is bias. The information is valid and up-to-date. The facts are accurate and can be verified in more than one source.
Why is the concept of financial markets important?
The transfer of funds between savers and investors (through institutions such as banks and stock markets) helps drive the nation's economy.
Which of the following statements about investments is correct?
There is no such thing as a risk-free investment.
What is the common element of all of the financial careers listed on the diagram?
They are all qualified professionals.
While making financial decisions, what are people doing when they economize?
They are choosing an option that has the best combination of costs and benefits.
Why were some people in the United States opposed to having a central bank?
They thought it would have too much power.
Which of the following is an effect of NOT having/keeping up with a budget? (Select all that apply.)
You have no record to keep track of where your money is going. It is easy to lose track of how much items cost. You may run low on available money to spend.
Figuring out fixed expenses, variable expenses, and debts you owe are all part of planning __________
a budget
What research tool is a collection of information that is targeted for specific topics or types of material?
a database
Which professional helps people and businesses meet their long-term financial goals?
a financial planner
A financial planner is __________.
a qualified professional who helps individuals and businesses meet long-term financial goals
Which professional reviews and prepares financial records and tax reports?
an accountant
A financial institution is a company that assists in financial transactions such as _____. (Select all that apply.)
banking investments loans
What likely caused more money to be spent than was budgeted for?
car problems
When you continually pay credit card bills and other loan payments on time you are building a good?
credit score
When renting an apartment what personal financial information will management look at? Mark all that apply
credit score if you pay your bills on time credit report
According to the paragraph about savings, how often should you "pay yourself"?
each month
A trade-off involves choosing all or nothing.
false
An accountant is a lawyer who specializes in tax law and helps individuals solve problems with the Internal Revenue Service (IRS).
false
Banking similar to how we know it began in London during the late Middle Ages.
false
Budgeting is only important if you do not make a lot of money.
false
Financial goals should be general, so you can easily adjust them to fit any changing needs.
false
One tip for evaluating investment opportunities is to look for risk-free investments.
false
Some people in the United States were opposed to having a central bank because they thought it would not be powerful enough to effectively handle their finances.
false
The Constitution directly states that Congress has the authority to create a national bank
false
The financial system is used to help transfer funds between government agencies and international markets.
false
The psychologist's study involving money in a bowl demonstrated that rich people are more greedy than the average person
false
The safer the investment, the higher the return.
false
Thomas Jefferson proposed chartering the first national bank.
false
When determining your income, you should list the amount that you earn before taxes are taken out of it.
false
When you are young it is difficult to get your finances in order.
false
Your auto insurance payments are an example of paying flexible expenses.
false
Match each term to its definition.
financial system system that transfers funds between savers and investors through institutions such as banks and stock markets return profit or loss on an investment risk possibility for loss on an investment diversification investing in different financial assets to minimize risk
What will be Max's opportunity cost if he studies five extra hours and receives the benefit of getting an A- in his government class?
five hours of time he could have spent with his friends
Match each term to its definition.
fixed expenses unchanging expenses, such as loans, mortgages, and car insurance flexible expenses changing expenses, such as groceries, cell phones, and utilities consumer spending the rate at which consumers spend money, which affects the economy by creating and maintaining the job market consumer prices conditions that can sway a consumer's willingness to buy goods or services
When setting up a spending plan, you should see if there are ways to decrease your __________.
flexible expenses
Interest rate risk is the risk that interest rates on loans will __________.
fluctuate
Praise and earnings from wages are examples of __________.
incentives
The risk that the price of a good or service may increase if an individual waits to buy it is called __________.
inflation risk
Things that are untouchable but are considered important to an individual, such as one's health and happiness, are called __________.
intangible items
In the terms of researching financial information, what does it mean to discriminate?
judge financial institutions based on what you've heard about them
When planning for college and retirement, it is good to be involved in _____ investments.
long term
Match each term to its definition.
long term setting a financial goal that will take five years or more to achieve short term setting a financial goal that will take less than one year to achieve needs things such as food, clothing, and shelter that are necessary for survival wants desires that can be satisfied by consuming a good or service
Planning for retirement is an example of __________.
long term goal
What is the common thread that links all of the finance careers together?
management of assets
You should review your budget at least __________.
once a month
___ is when a decision is made that involves giving up the value of a personal choice in order to choose another alternative.
personal opportunity cost
Match each type of risk to the correct example.
personal risk riding your bicycle on a busy street relational risk company going bankrupt and investors losing the money invested income risk losing your job due to an accident inflation risk waiting until next year to buy a car and risking that the price will go up interest rate risk an increase of the overall cost of borrowing a loan
Match each term to its definition.
relational risk the risk of harm to the relationship between a company and the stakeholders inflation risk the risk that the price of a good or service may increase if an individual waits to buy it interest rate risk the risk that interest rates on loans will fluctuate, which affects the cost of borrowing personal risk increasing the opportunity for the chance of injury or loss income risk the risk of losing one's job to unexpected circumstances such as a health problem, an accident, or a job change
Which of the following is an element needed when creating a budget? (Select all that apply.)
setting financial goals listing your monthly income accounting for fixed and variable expenses
What was Shanti's trade-off?
taking a semester-long course at the local university
Which of the following is NOT a type of financial risk?
taxes risk
When tracking your expenses to set up your budget, you should keep a list of your expenses for __________.
that month
A trade-off is __________.
the alternative someone gives up when making an economic choice
In the video, the lifeguards trained by __________ were superior to other lifeguards.
the for-profit business
What is relational risk?
the risk of harm to the relationship between a company and the stakeholders
You should be cautious about companies that try to get you to invest quickly because __________.
they aren't giving you time to research their company
Personal values are __________.
things that are important to an individual that influence life choices
To economize is __________.
to make decisions according to what is believed to be the best combination of costs and benefits
A(n) __________ is an alternative people give up when they make a decision, while a(n) __________ is the value of the next-best alternative that people give up when they make a choice.
trade-off, opportunity cost
A spending diary can help you keep track of your expenses.
true
A tax attorney is a qualified professional who is knowledgeable about tax law.
true
According the video, every penny should have a purpose.
true
According to the video, minimizing risk involves being patient and avoiding ups and downs.
true
Alexander Hamilton argued that the Constitution implied that Congress could charter a national bank.
true
All careers in finance have to deal with the management of assets.
true
Another challenge for young adults in dealing with the concepts of financial literacy is the increase of unemployment.
true
Before 1863, states each used their own currency.
true
Being financially literate means that you have the knowledge and understanding to make informed financial choices.
true
Diversification helps minimize risk when investing.
true
Doing research, for any type of venture, can help minimize risk.
true
Even everyday expenses, such as buying water, can add up to costing a lot of money per year.
true
Financial markets are important to understand because the transfer of funds between savers and investors helps drive the nation's economy.
true
Financial planning is a process that involves consistently making wise financial decisions.
true
For careers in finance, it is important to have strong skills in client relations.
true
If Dan had decided to work the entire year at his job, his opportunity cost would have been the trip he didn't take.
true
One of the strategies in the article for those who have trouble controlling their spending is to only use cash.
true
One way to prepare for an unexpected occurrence, such as an accident or unexpected expense, is to set aside some money each month for an emergency fund.
true
People are motivated by self-interest when they make choices according to incentives, expected utility, and their desire to economize.
true
Taking personal risk is increasing the opportunity for injury or loss.
true
The downside to leasing a car instead of buying it, is that at then end of the lease you don't own the car and could owe money on it.
true
The safer the investment, the lower the return.
true
To discriminate (financially) is to search for financial information that is accurate and reliable.
true
To economize means to make the best decisions.
true
Today's young adults in their 20s feel that financial planning is complicated and overwhelming.
true
Using a decision-making grid can help you see the benefits and costs of certain decisions.
true
Usually, when dealing with trade-offs, you have to sacrifice some of one thing in order to obtain more of another thing.
true
When following the elements of creating a budget, the first step is listing your monthly income.
true
When setting long-term goals, you should list your future financial needs as well as the amount of money you would like to save.
true
When setting short-term goals, you should list your priorities and separate goals that satisfy your wants.
true
When you factor in inflation the average person makes less money than their parents did 30 years ago.
true
When you make a financial decision, you also accept certain financial risks.
true
You should do research about a company before investing in it.
true
Your credit score can affect your car insurance payment and your job eligibility with future employers.
true
The satisfaction gained from the use of a good or service is know as _____.
utility
Which of the following is a factor that drives the economic choices we make? (Select all that apply.)
utility cost incentive
