Chapter 1 Review

Refers to all the money decisions a person or family must make in order to earn, budget, save, and spend money.

• Cash flow statement

• financial aid

• personal finance

• scarcity

Personal finance is about _______% behavior and _______% knowledge.

• 80,20

• 60,40

• 20,80

• 70,30

A measurement of the total dollar value of a person’s or business’ assets minus liabilities is called:

• wealth

• net worth

• earnings

• income

A liability can be described as:

• money you owe, a debt

• something you own that has value

• money that you have in a savings account

• something that goes down in value over time

The First Foundation is:

• get out a debt

• pay cash for a car

• build wealth and give

• save a $500 emergency fund

Which of the following allows invested money to grow over time?

• taxes

• compound interest

• simple interest

• inflation

The condition of having unlimited wants but limited resources is known as:

• scarcity

• global demand

• consumerism

• budgeting

A plan for spending

• budget

• economy

• checking account

• scarcity

This is the second foundation

• get out of debt

• save $500 emergency fund

• pay cash for college

• pay cash for first car

This is the third foundation

• pay cash for college

• build wealth and give

• save a $500 emergency fund

• pay cash for your first car