Gen Prin: All Other Flashcards

Question

Bankruptcy

Answer 1

On record 10 years exc ch 13 7 yrs

Answer 2

Expansion "recovery" Contraction Most notably what is happening with GDP and unemployment Contraction

Answer 3

GDP and employment rebound Credit begins to grow Profits grow rapidly Policy is stimulative Inventories are low and sales improve

Answer 4

Growth moderates Credit tightens Earnings under pressure Policy contractionary Inventories grow and sales growth falls

Answer 5

Falling activity Credit dries up Profits decline Policy eases Inventories and sales Fall

Answer 6

Total market value of a country's income and output of goods and services produced by all the people and companies in the US Important because it indicates the pace of growth or decline of the economy relative to history Determines which sectors are over or underperforming Can compare the size and growth rate of economies throughout the world

Answer 7

Excludes imports, inflation, transactions were money changes hands but no goods or services are produced, excludes income of US citizens working abroad excludes profits earned by us companies in foreign countries

Answer 8

Y=C+I+G+(X-M) C equals consumer spending I investment made by industry G is government spending X is exports M imports Or it might say NE for net exports

Answer 9

It's what will CAUSE PRICES to rise or fall If supply is greater than demand prices will fall If demand is greater than supply prices will rise

Answer 10

An increase in the price will increase the supply because suppliers are willing to supply to consumers when prices are higher

Answer 11

Inverse relationship between price and quantity demanded Price goes down quantity demanded goes up

Answer 12

Controls the money supply Influences lending rates May slow down or stimulate the economy Controlled by the Fed. Tools -Discount rate the rate at which member banks borrow from the Fed -Reserve requirement percentage of deposits that must be held on reserve -Open market activities fed buys and sell securities in the open market and also said some margin percent under regulation t Fed goals Maintain sustainable long-term growth Maintain price levels Maintain full employment

Answer 13

Supply of a particular good depends on Price Cost of production including labor Level of technology Demand depends on Price Prices of other goods especially substitutes Consumers income and tastes

Answer 14

Congress controls Taxation expenditures and debt management Congress goals High employment Sustainable growth Stable prices Tools are spending and taxation

Answer 15

Instead of stimulating the economy it can have the opposite effect through the impact to the bond market

Answer 16

When this is an option regarding monetary policy it is most likely wrong It can be influenced by the discount rate but is not set by the Fed

Answer 17

Remember that the personal balance sheet has assets at fair market value I think they just give us a balance sheet and a cash flow

Answer 18

Front end. Mortgage debt servicing ratio Piti\gross income <=28% Back end. Total debt or debt repayment ratio (Piti+other debt)/Gross income <=36% Consumer debt <=20% Non housing debt divided by net income

Answer 19

Rules of thumb Two income household the norm is 3 months or 6 months if both are at the same company One income household Norm is 6 months

Answer 20

Usually number One financial planning priority is emergency fund Except if young children life insurance and guardianship Or except if you have so much debt you can't save then pay off the debt is priority

Answer 21

Consumer credit protection act Equal credit opportunity act Fair credit REPORTING act Fair credit BILLING act Fair debt collection practices act

Answer 22

Consumer financial protection bureau CFPB

Answer 23

Conventional and FHA do not have funding fees VA and USDA have no down payment and no PMI FHA has PMI for 11 years or life of the loan. What?? USDA has fixed only FHA requires three and a half to 20% down VA has 2.3 to 3.6% funding fees but waived for disabled See picture for conventional VA FHA USDA

Answer 24

Look to reduce years and rates, when possible The argument of taking on the lower monthly payment through a longer or variable rate mortgage and investing the balance makes two huge assumptions The discipline of the investor The return of the investor

Answer 25

Make sure that when points rolled into the mortgage balance You account for them in your calculations

Answer 26

Home equity loan Life insurance cash value Qualified plans Defer admission Community college Also see tier 3 Roth ira, traditional ira, mutual funds

Answer 27

Helps to identify the loss aversion bias. Where losses are perceived as more severe than an equivalent gain

Answer 28

They are NOT added back as income on a financial aid application

Answer 29

An order to creditors to halt action It stops foreclosures of property repossessions and sales of property while repayments are made It does not stop child support, alimony or criminal suits Criminal suits are not halted