Upgrade to remove ads
Personal Finance Ch. 1
Terms in this set (16)
A person or organization that uses a product or service
The granting of a loan and the creation of debt; any form of deferred payment
An obligation of repayment owed by one party (the debtor/borrower) to a second party (the creditor/lender); in most cases this includes repayment of the original amount plus interest
A system by which goods and services are produced and distributed
The knowledge and skill set necessary to be an informed consumer and manage finances effectively
A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount)
A debt evidence by a "note" which specifies the principal amount, interest rate and date of repayment
All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.
A period of temporary economy decline during which trade and industrial activity are reduced
7 key components of financial planning
Assess financial situation, set money goals, make a plan, execute the plan, know your money personality, monitor your plan, replace money myths with truths
What legislative program, established during the Great Depression, helped shape consumer lending policies that convinced commercial banks that consumer credit could be a profitable industry?
The New Deal
In what way was the New Deal intended to help consumers?
Credit loans could help boost the economy and give America a foot up
Why was buying things on credit uncommon before 1917?
It was illegal, not socially acceptable, no profit
What was the major financial change between post- World War II borrowers and borrowers after 1970?
Borrowing was still popular but there weren't the well paying jobs like there had been after the war
What effects did the Great Depression have on the credit industry?
Credit became a profitable industry from the New Deal
What effect did did the post-war era have on consumer borrowing?
Supported an overconfidence in the economy
Other sets by this creator
Economic Systems 2.1
The Aerodynamics of Flight
Stability and Control