Chapter 1: Personal Financial Overview

Question 1

Helps you reach important goals and financial security over your lifetime

Answer 1

Financial Planning

Question 2

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

Answer 2

Financial Security

Question 3

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

Answer 3

Financial Literacy

Question 4

Using your resources to achieve predetermined objectives

Answer 4

Management

Question 5

Tangible items that can be purchased

Answer 5

Goods

Question 6

Intangible activities that another person usually performs for a fee

Answer 6

Services

Question 7

Things that are considered necessities

Answer 7

Needs

Question 8

Things you would like but they are not essential

Answer 8

Wants

Question 9

Your beliefs about what is important and desirable

Answer 9

Values

Question 10

The overall structure of values and goals that guides your behavior

Answer 10

Value System

Question 11

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

Answer 11

Ethics

Question 12

An objective you want to attain

Answer 12

Goal

Question 13

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

Answer 13

Priority

Question 14

An established measure of quality, value, or quantity

Answer 14

Standard

Question 15

Tools you can use to reach goals

Answer 15

Resources

Question 16

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

Answer 16

Cost-benefit analysis

Question 17

The change in total benefit of using one additional unit

Answer 17

Marginal benefit

Question 18

The change in total cost of using one more unit

Answer 18

Marginal cost

Question 19

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

Answer 19

Trade-off

Question 20

The value of the option you gave up

Answer 20

Opportunity cost

Question 21

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

Answer 21

Systematic decision-making

Question 22

The state of the economy at a given time

Answer 22

Economic conditions

Question 23

Period of slow or no economic growth

Answer 23

Recession

Question 24

Period of rising prices

Answer 24

Inflation

Question 25

The statistical characteristics of the population

Answer 25

Demographics

Question 26

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

Answer 26

Culture

Question 27

The application of science and research to human life and environment

Answer 27

Technology

Question 28

Refers to worldwide markets, links and communications

Answer 28

Globalization