Chapter 13: Managing Finances Flashcards
Financial management is
the science or practice of managing money or other assest
Financial security
is the ability to meet day to day obligations while planning, saving and investing to achieve future financial goals
Real income is
measured in prices at a certain time, reflecting the buying power of current dollars
Income tax is
Personal tax levied on individuals or families on the basis of income received
Taxes are
Compulsory levies that are an important source of government revenue
Diversification is
having a mix of investments as a way to spread risk across several categories
Liquidity
The speed and ease of retrieving cash or turning another type of investment into cash
Business cycle is made up of what three parts and describe each
a) Recession: moderate and temporary decline in the economy
b) Recovery: hopeful stage when things are looking better
c) Expansion: Prosperity, high growth, high employment rates
Household production is not included in what
Gross domestic product
Consumer price index is
a measure of price, main measure of inflation
Level of living is the measure of what
the goods and services affordable by and available to them
What is the Annual percentage rate
Average yearly rate of interest paid over the life of credit or a loan
Credit bureaus is
reporting agencies that collect, store and sell financial information
FICO score is
numeric value assigned to credit habits and credit score
High scores are better
Social security act is
retired persons and selected others receive monthly stipends from the government
