Personal Finance Ch 1 – Flashcards
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Consumer
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A person or organization that buys/uses goods or services
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Financial literacy
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The knowledge and skill set necessary to be an informed consumer and manage finances effectively
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Credit
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The granting of a loan and the creation of a debt; any form of deferred payment
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Loan
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A debt evidence by a "note: which specifies the principle amount, interest rate and date of repayment (example: house mortage)
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Debt
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An obligation of repayment owed by one party (debtor/borrower) to a second party (creditor/lender)
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Interest
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A fee paid by a borrower to the lender for the use of borrowed money
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Economy
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A system by which goods and services are produced and distributed
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Personal Finance
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All of the decisions and activities of an individual or family regarding the money, including spending, saving, budgeting. etc
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Learning the language of money is not that important because you will be able to depend on finical planners to manage your money?
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False
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Which of the following is NOT a reason credit is marketed so heavily to consumers in the United States?
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The use of credit is not socially accepted in the United States.
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During the Great Depression, New Deal policy makers came up with mortgage (home loans) and consumers lending policies that convinced commercial banks that?
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Consumers credit could be profitable
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Describe some of the mistakes americans often make when it comes to money?
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Getting loans, buying things they can't afford, going onto debt.
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Explain why understanding your money personality is important when it comes to developing a money plan thats right for you
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Savers will generally have less work to do and won't need as much discipline as spenders, who will have to slowly ween themselves off of their disdainful habits.
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Does the history of credit and consumerism segment make you view the use of credit differently then you did before?
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Yes, because i now know that i shouldn't just charge every things i buy on a credit card and should only buy something if i have the cash
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Explain how marketing can affect your decisions when it comes to spending money?
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marketing affects where and how we spend pour money through advertisements; it can encourage us to buy now and pay later
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does managing you money all mean that you can't have fun with your money
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No, you can always budget some money for fun activities
