First Exam- vital concepts Flashcards
The percentage of each dollar of income, on average, that a person spends for current needs instead of savings
Average propensity to consume
consumer price index
a measure of inflation based on changes in the cost of consumer goods
the phase of the economic cycle when the gross domestic product falls
contraction
the phase of the economic cycle when levels of employment and production are high and the economy is growing generally accompanied with RISING PRICES for goods and services
expansion
intangible assets, such as savings accounts and securities, that are acquired for some promised future return
financial assets
results that an individual wants to attain, such as buying a home, building a college fund, or achieving financial independence
financial goals
employee benefit plan wherein the employer allocates a certain amount of money and then the employee “spends” that money for benefits selected from a menu covering everything from child care to health and life insurance to retirement benefits
cafeteria plan
the total of all goods and services produced in a country; used to monitor economic growth
gdp
target dates in the future when certain financial objectives are expected to be completed
goal dates
a state of the economy in which the general price level is increasing
inflation
the medium of exchange used as a measure of value in financial transactions
money
the phase of the economic cycle when an expansion ends and a contraction begins
peak
a systematic process that considers important elements of an individual’s financial affairs in order to fulfill financial goals
Personal financial planning
an individual or firm that helps clients establish financial goals and develop and implement financial plans to achieve those goals
professional financial planner
purchasing power
the amount of goods and services that each dollar buys at a certain time
