26 terms

Business Skills for Life Test 1

Higher consumer prices are likely to be accompanied by what?
higher interest rates
Using the rule of 72, if inflation rate is 9%, prices would double in how many years?
8 years
What is meant by the Adult life cycle?
The stages in the family and financial needs of an adult
Define Economics
The study of how wealth is created and distributed
The main economic influence that determines prices is what?
supple and demand
The Fed refers to what?
the Federal Reserve System
The main responsibility of the Fed is what?
Maintaining an adequate money supply
Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This refers to what type of risk?
A major activity in the planning component of financial planning is what?
Allocating current resources for spending
The ability to convert financial resources into usable cash with ease is referred to as?
the problem of bankruptcy is associated with poor decision in the ________ component of financial planning.
A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends a direction fro your financial activities is a ___________
Financial plan
When an individual makes a purchase without considering the financial consequences of that purchase, they are ignoring the __________ aspect of financial planning?
the success of a financial plan will be determined by what?
how resources are used
As Jean Tyler plans to set aside funds for her young children's college education, she is setting a _____________ goal?
long term
What is opportunity cost?
what you give up to get something else you want
What is meant by "the time value of money"?
increase in an amount of money as a result of interest earned.
The amount of interest earned is determined by multiplying the amount in savings by the _____________.
annual interest rate and the time period.
If a person deposited $50 a month for 6 years earning 8 percent, this would involve what type of computation?
Future value of a series of deposits
Which type of computation would a person use to determine current value of a desired amount for the future?
Present value of a single amount
What is the first step of the financial planning process?
Determine current financial situation
________ refers to the danger of lost buying power during times of rising prices.
Inflation risk
An example of opportunity cost is ___________.
saving money instead of taking a vacation
The uncertainty associated with decision making is referred to as ___________.
Changes in income, values, and family situation make it necessary to _________.
evaluate and revise your actions.
A _______ is an employment position that is obtained mainly to earn money.