Chapter 6

Question 1

what is a major source of teen income

Answer 1

parents

Question 2

how people maintain income from two major sources

Answer 2

work and wealth

Question 3

what are two reasons that impact saving and investing?

Answer 3

1. income
2. expectations
3. current interest rates
4. tax laws

Question 4

what is the personal finance plans that are balanced when income and expenditures are special?

Answer 4

budget

Question 5

what are the 3 steps in planning a budget

Answer 5

1. setting financial goals
2. estamating income
3. planning expenditures

Question 6

what are the 3 factors that influence saving?

Answer 6

1. safety
2. rate of return
3. liquidity

Question 7

liquidity

Answer 7

is now easy you can convert your savings to cash. the easier it is for you to withdraw your money, the lower the interest rate you’re likely to earn

Question 8

Where do people put their savings?

Answer 8

1. saving deposits

2. rension and retirement funds

Question 9

what does CD stand for?

Answer 9

certificate of deposit

Question 10

what does IRA stand for

Answer 10

individual retirement account

Question 11

what is spread their risks so that all of their savings or investments are not in one area?

Answer 11

diversify

Question 12

what are some consumer credit terms?

Answer 12

1. principal

2. annual percentage rate

Question 13

what does apr stand for

Answer 13

annual percentage rate

Question 14

what are two advantages of credit

Answer 14

1. immediate possesion
2. flexibility
3. safety
4. emergency funds
5. character reference

Question 15

what are two disadvantages of credit

Answer 15

1. overspending
2. higher costs
3. impulse buying

Question 16

what are two different types of credit

Answer 16

1. home mortages
2. auto and consumer loans
3. charge accounts
4. credit cards

Question 17

What are the 3 c’s to be able to obtain credit?

Answer 17

1. character
2. capacity
3. capital

Question 18

is to provide money for a family when a wage earner dies

Answer 18

life insurance

Question 19

provides coverages for a specific time and is the least costly(5,10,15, and 20 year terms

Answer 19

term

Question 20

protects people aganist the financial problems caused by accident or illness

Answer 20

health insurance

Question 21

exchanges complete medical coverage for a flat annual fee or co pay

Answer 21

HMO

Question 22

what does HMO stand for

Answer 22

health maintenance organization

Question 23

what president created the consumer bill of rights

Answer 23

president kennedy

Question 24

what are the 4 rights to the consumer bill of rights

Answer 24

safety, to be informed, to choose, and to be heard

Question 25

is an organization that sets standards for business ethics

Answer 25

Better business bureau

Question 26

what does BBB stand for

Answer 26

better business bureau