FYC3005 Exam 1 – Flashcards

-A steady and sustained rise in general price levels across economic sectors; measured by the changing cost over time of a "market basket" of goods and services that a typical household might purchase -measured with consumer price index(CPI) and personal inflation rate

Usefulness or cost of the next increment of something

-tells you how long you could continue to meet your monthly -most people need a ratio of 3 or more

-Total assets/total debt -gives indicator of the degree to which assets exceed debts -ideally this number could be infinity if you had not debts -A ratio of less than 1 means your insolvent and debts exceed your assets

Annual debt repayment/gross income x100 -compares all annual debt payments (plus rent) to annual gross income -A ratio of 36 percent or less indicates income is sufficient and debt load is not too high

-depends on filing status -6,300 for singles -12,600 for married couples

add up all your deduction and report them on a separate form

-your employer will report your income to the IRS at the end of the year and also send a copt of the W-2 form to you -the form also includes the total amount your employer has withheld over the year and sent to the IRS as prepayment of your taxes

-Federal law governs EFT accounts and requires that you be sent a disclosure statement of the rules of the account and receive monthly periodic statements outlining the activity

-owned individually so that only you have access to the funds -can be set up automatically to go to another person in the event of your death

-makes each owner fully able to access all of the funds

-gives each person ownership of a specific share of the funds such as 50 percent each

-money insurance, income that has not been adjusted for inflation and decreasing purchasing power

-income measured in constant prices relative to some base time period -it reflects the actual buying power of the money you have as measured in constant dollars

-the opportunity cost of any decision is the value of the next best alternative that must be forgone

-employee sponsored, defined-contribution retirement plans including 401(k) plans and similar 403(b) and 457 plans

-describes an individuals or families financial condition on a specified date

-summary of all income and expense transactions over a specific time period