personal financial literacy mrs. chyko. reflation - occurs when prices are high, drop, and then...
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Mid-Term Review
Personal Financial LiteracyMrs. Chyko
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1. List and define the 3 types of inflation.
Reflation - Occurs when prices are high, drop, and then rise to their previous level
Disinflation - Occurs when prices are rising, but at a slow rate
Hyperinflation - Rapidly rising, out-of-control price increases
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2. Describe the characteristics of a growing economy
Lots of jobs People are spending money Financial security is easier
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3. List and define the 3 causes of inflation
Cost Push-The cost to create the product rises and is NOT offset by productivity
Demand Pull-Consumers want to buy more goods and services than producers supply
Real Cost-Resources diminish or become harder to get
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4. List and define the 3 types of pricing strategies
Market Based Value Based Cost-Plus
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5. Explain the impact inflation has on our purchasing power
Inflation REDUCES our purchasing power
As prices rise our income does NOT Consumers cannot buy as much with
the same amount of money
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6. Explain why the job market changes overtime
Peoples needs and wants change Need for different types of workers
evolve Technology changes
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7. Explain the difference between hard skills and soft skills
Hard skills are technical skills Working machinery, nursing procedures
Soft skills are people skills Communication, team work, leadership
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8. Define tuition.
The charge for instruction at a school Community college, State college, Trade
school Government loans, grants,
scholarships, job
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9. Difference between required deductions & optional deductions.
Required - Income tax, Social Security tax, and Medicare tax
Optional – Insurances, Savings plan, Retirement plan (401K)
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10. Difference between disposable income and discretionary income
Disposable – Income after Taxes are paid
Discretionary – Income after needs are met
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11. Define 1040EZ Form
Form used to process taxes NO DEPENDENTS Can be used by single and joint filers
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12. List the five components of a SMART Goal
Specific Measurable Attainable Realistic Time-bound To help us think our goals through
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13. Define advertising
Method of informing or persuading consumers
Promoting and selling products
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14. Examples of advertisements:
Media – TV, radio Internet – Pop up windows Print – Newspaper, flyers Direct – Sample of product
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15. The 6 steps of the Decision Making Process
Define problem or need List options Compare options Make decision Take action Revaluate
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16. The importance of Time Management.
List 5 characteristics of Time Management
1. PRIORITIZE2. BREAK DOWN LARGE PROJECTS INTO SMALLER ONES3. MAKE A TO-DO-LIST4. USE A DAILY PLANNER5. WORK WHEN YOU ARE MOST RODUCTIVE
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17. Explain the difference between ECONOMIZING and OPTIMIZING
Economizing – save as much possible; spend only when necessary
Optimizing – spreading money as far as it will go. Get the most value for the money spent
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18. An individual that can qualify as an EXEMPTION
YOU Pay for more than 50% of a persons living expenses.
The individual cannot be claimed by anyone else.
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19. Difference between a personal goal, financial goal, & financial plan
Personal goal – things you want to achieve
Financial goal – how you will pay for your personal goal
Financial Plan – Contains personal goals and a timeline for reaching these goals and methods you will use to finance them.
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20. Explain the benefit of utilizing a Pay-Yourself- First Budget
Requires you to save money first!! Income = Savings + Expenses
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21. Explain how to calculate the dollar variances on your budget
Determine the difference between actual and planned dollar amounts.
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22. Explain favorable variance and unfavorable variance
Favorable Variance – Earn or save more than planned and spend less
Unfavorable Variance – Earn or save less than planned and spend more
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23. 3 Items you would gather & analyze for financial planning
Personal budget, checkbook, and current pay stub
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24. Explain the difference between identity theft and phishing
ID Theft - Act of using someone’s personal information without permission to commit fraud or crime
Phishing – Scam used to get individuals to give out personal information
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25. Demonstrate payroll process by calculating:
- Regular pay - Overtime rate per hour - Overtime pay - Gross pay - Required deductions - Optional deductions - Net Pay