Final Exam

Question 0

What is the difference between short-term, medium-term, and long-terms goals?

Answer 0

Short-term- 1 year or less
Medium- 1 to 5 years
Long- more than 5 years

Question 1

What is the difference between fixed, variable, planned, unplanned expenses?

Answer 1

Fixed- same month to month
Variable- changes month to month
Planned- spending you plan
Unplanned- née pecten emergency

Question 2

Three golden rules?

Answer 2

1- good education
2- spend less than you earn
3- save early and often

Question 3

What is human capital?

Answer 3

A combination of intellect knowledge, experience and attitude

Question 4

Define scarcity

Answer 4

Resources are limited

Question 5

What are the fives steps of the PACED decision making model?

Answer 5

P- state the problem
A- list the alternatives
C- identify the criteria 
E- evaluate the alternatives 
D- make a decision

Question 6

What is opportunity cost?

Answer 6

The highest valued alternative that is have up when a choice is made

Question 7

What is the APR?

Answer 7

APR; the interest rate changed, expressed as a percent per year, for the use of credit

Question 8

What is the difference between a borrower and a lender?

Answer 8

A borrower borrows and a lender lends

Question 9

What are financial institutions?

Answer 9

Intermediaries that help channel funds from savers to borrowers

Question 10

What is a FICO score? What is not included and what is included in the store?

Answer 10

A mathematical model that assesses a person’s reliability in repaying borrowed funds

Question 11

Define minimum payment

Answer 11

The smallest amount a person is required to pay in a given month on an open-ended credit account

Question 12

Costs and benefits of credit

Answer 12

Costs- finance charges
Future buying power may be restricted 
Late fees
Total cost of items may be higher
Danger of identity theft

Benefits-use of the item now
Take advantage of sales
Convenience of paying
Keep better track of spending
Safer than carrying cash

Question 13

Comparing credit card offers

Answer 13

Type of accountant 
Annual fee
Grace period
Annual percentage rate
Credit limit
Minimum monthly payment 
Finance charge calculation method
Late payment fee, other fee
Other features

Question 14

What is the federal reserve system

Answer 14

Central bank of the United States

Purpose is to ensure a stable economy for the nation

Question 15

Mean of monetary policy

Answer 15

Changes affect the nation’s supply of money and credit

Question 16

Difference between gross income. Net income, and discretionary

Answer 16

• total amount of money earned
• after all needs are met
• money based on wants not needs

Question 17

Define net worth, assets, and liabilities

Answer 17

• person’s assets and liabilities
• money and items of value you own
• any debt you owe that must be repaid