Dave Ramsey Chapter 1.1 Key Terms

In the financial world, a Consumer is:

• A person or organization that uses a product or service

• A system by which goods and services are produced and distributed

• A fee paid by a borrower to the lender for the use of borrowed money

• A person that sells items, or a service, to generate a profit.

What does Credit mean in the financial world?

• A fee paid by a borrower to the lender for the use of borrowed money

• Any form of deferred payment; the creation of debt

• A system by which goods and services are produced and distributed

• A person that sells items, or a service, to generate a profit.

How would you describe Debt?

• A system by which goods and services are produced and distributed

• Taking money out of your checking account to pay for an item

• An obligation of repayment owed by one party (the borrower) to a second party (the lender)

• A person that sells items, or a service, to generate a profit.

When you think of "a system by which goods and services are produced and distributed," you know we're talking about

• The Economy

• Financial Literacy

• Personal Finance

Financial Literacy means:

(*Hint: check multiple answers)

• A person that buys and sells products

• Having the knowledge and skill set to make wise decisions

• Knowing how to manage your money effectively

• Knowing that if you have no money in the bank (literally $0), a debit card is a great resource to help pay for things

What is the purpose of Interest?

• To prove to the bank that you can pay your bills

• To utterly wipe out any money that you have in your bank account

• To pay a fee to the lender for borrowing their money

When you take out a loan, what are you doing?

• Spending money

• Borrowing money

• Investing money

• Saving money

Which of the following does not encompass the world of Personal Finance?

• Making wise purchases

• Developing good saving habits

• Practicing regular budgeting

• None of the above