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Economics and Personal Finance > Final Exam Review (EPF) > Flashcards

Final Exam Review (EPF) Flashcards

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1
Q

What concept says that money received today is worth more than the same amount of money received sometime in the future?

A

The Time value of money

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2
Q

To determine the time value of depositing $100 in a savings account, what two things does a person need to know?

A

interest rate and received interest

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3
Q

What is interest earned on interest?

A

compound interest

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4
Q

What helps you to calculate how fast your savings will double in value at a given interest rate?

A

The rule of 72

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5
Q

What are the four factors of production?

A

Land, Labor, Capital, Entrepreneurship

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6
Q

What is a centrally planned economy?

A

Command Economy

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7
Q

What type of economy has individuals and private businesses own and control production?

A

Market Economy

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8
Q

What is the study of how individuals and societies satisfy their unlimited wants and limited resources?

A

Economics

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9
Q

What exists when there are not enough resources to satisfy human wants?

A

Scarcity

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10
Q

What two things do you need to consider when making a decision?

A

Marginal costs and Marginal benefits

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11
Q

What is known as the father of economics?

A

Adam Smith

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12
Q

What famous economics book did Adam Smith write?

A

Wealth of nations

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13
Q

What government organization is responsible for distributing new coins and currency into the general economy?

A

The Federal Reserve

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14
Q

Why is depositing money into a bank or credit union usually a better idea than saving your money under a mattress?

A

Guaranteed interest

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15
Q

What institution’s deposits are insured by the NCUA?

A

Credit unions

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16
Q

What can you apply for if you do not have enough money to purchase a car with cash?

A

Loan

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17
Q

When you need to access your money within the next few months, where should you invest your money? The stock market or a savings account?

A

Savings Account

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18
Q

What type of investment represents ownership in a company?

A

Stock

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19
Q

Why does a company issue bonds?

A

To raise money for expansion

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20
Q

What is the relationship between risk and return?

A

Higher the risk, Higher the return

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21
Q

What are corporate profits paid to stockholders?

A

Dividens

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22
Q

What is the federal government that requires all stock issuances be registered?

A

Securities and Exchange Commision

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23
Q

What is the typical retirement age?

A

65

24
Q

What concept is best described as, “a dollar today is worth more than a dollar tomorrow?”

A

Time Value of MOney

25
Q

What are the two most important factors in calculating your credit score?

A

Payment history and amount owed

26
Q

Why is it more difficult for young adults to borrow money?

A

Less payment history

27
Q

What types of items will you find on your credit report?

A

Salary

28
Q

Which government run website allows you to download your credit report for free each year?

A

annualcreditreport.com

29
Q

What is the single best way to improve a credit score?

A

Make payments on time

30
Q

How does a low credit score impact the interest rates available to the consumer?

A

increases them

31
Q

What is your creditworthiness measured by?

A

fico score

32
Q

What debt payoff method pays off the smallest loans first, which can be motivating because you have fewers sources of debt?

A

snowball

33
Q

What is the largest category of earned income?

A

salaries and wages

34
Q

Education, training, and experience increase what type of capital?

A

human capital

35
Q

What are retirement plans, paid vacation, and health insurance plans considered?

A

benefits

36
Q

Gifts, returns on investments, and inheritance are considered what type of income?

A

unearned income

37
Q

What is the amount you earn before paying taxes called?

A

gross pay

38
Q

What is the government agency responsible for processing tax returns?
The Internal Revenue Service (IRS) administers and enforces U.S. federal tax laws.

A

IRS

39
Q

What month is considered tax season?

A

April

40
Q

What is the amount of tax owed to the government by a taxpayer in a given year?

A

Tax Liability

41
Q

The amount owed on a homeowner’s insurance premium can be influenced by what factors?

A

Value of the property, type of property, location of policy

42
Q

What type of insurance covers the possessions of a renter?

A

renters insurance

43
Q

What is the amount a policyholder must pay before the insurance pays a claim?

A

deductible

44
Q

What is the purpose of insurance?

A

Protect assets, shared risk, protect against loss

45
Q

What is insurance frequently described as a method of “sharing the risk?”

A

Shared with the other policy holders

46
Q

Why would a policy have a high deductible?

A

Lower premium

47
Q

What is the cost of an insurance policy?

A

Premium

48
Q

What is the flat-fee paid when you see a doctor?

A

Lo-pay

49
Q

The law of supply states that producers will ___ the quantity of their supply at high prices.

A

increase

50
Q

What is the willingness and ability to bring to market specific quantities of goods or services?

A

supply

51
Q

What is the willingness and ability to buy specific quantities of a good or service?

A

demand

52
Q

The law of demand states that people will buy more goods or services at ___ prices.

A

lower

53
Q

How can you identify the equilibrium price and quantity?

A

interest

54
Q

What is the key signal to buyers and sellers about a good or service?

A

price

55
Q

What describes the degree to which buyers and sellers respond to price changes?

A

Elasticity

Economics and Personal Finance (3 decks)

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