Chapter 1 Study Guide Flashcards
Financial Goals should be:
- Specific
- Measurable
- Attainable
- Realistic
- Timely
Standard of Living
The necessities, comforts, and luxuries enjoyed or desired by an individual or family
The percentage of each dollar of income on average that a person spends for current needs rather than savings
Average Propensity to Consume
Intangible assets such as a ________ that are acquired for some promised future return, are known as _____
Savings Account and Securities
Financial Assets
Tangible Assets are ________ such as ______, _____ and can be held for either consumption or investment purposes
Physical Assets
House and Car
Personal Financial Planning - systematic process that considers important elements of an
individual’s financial affairs in order to fulfill financial goals
The amount of satisfaction received from purchasing certain types or quantities of goods and services
Utility
Short Term Goals
Intermediate Goals
Long Term Goals
1 year
2-5 years - She said 2-6
6+ years
Target dates in the future when certain financial objectives are expected to be completed
We accumulate things throughout our lives that are known as
Assets
Liquid Assets
Held in cash form converted to cash easily
Personal Property
Tangible assets that are movable
Real Property
Tangible assets that are not movable
Investments
Stocks and Bonds
Assets are the things we own and liabilities are the things we
owe
____1_____ - An employee benefit plan wherein the employer allocated a certain amount of money to each employee and then lets the employee spend_________2___. Plans cover everything from ___3_ to __4____, several levels of ___5_ and ___6_ insurance coverage
- Flexible Spending or cafeteria plan
- That money for benefits that suit his/her age, marital status, number of children, level of income and so on
- Childcare
- retirement benefits
- health
- life
Government: taxation and
regulation
Business: sustains our _______ system and they create a _____ in which _____ select from an array of goods and services
Free enterprise
Complete environment
consumers
Consumer: is the ______. The consumer’s choice of whether to spend or save has a direct impact on present and future circular flows of ____. Consumer’s choices determine the kind of ____ and ____ that businesses will provide.
Central player
Money
Goods
Services
The economy - our economy is influenced by interactions amoung
Government, business, and consumers
Expansion: Economic phases where the levels of the employment and production are _____ and the Economy is _____; generally accompanied by ____ prices for goods and services
(Upward arrow)
Growing
Rising
The phrase of the economic cycle when an expansion ends and a contraction begins
Peak
Contraction - the phrase of the economic cycle when real _____ falls
GDP - Gross Domestic Product
______ - The phase of the economic cycle when a ____ ends and a/an _____ begins
Trough
Contraction
Expansion
A state of the economy in which the general price level is increasing
Inflation
Gross Domestic Product - The total of all ______________; used to monitor _____ growth. In a strong economy the GDP level ____ with a high _______.
Goods and services produced in an economy
Economic
Increases
Employment rate
_______ - Measure of _____ based on changes in ____ of consumer goods and services
Consumer Price index (CPI)
Inflation
Cost
What determines your personal income?
- Demographics
- Education
- Where you live
- Career
