Econ Unit 2 Test

What is budgeting?

• What you spend your money on

• Planning how much to spend on a vacation

• The process of creating a plan to spend your money

• The process of getting out of debt

What is NOT a reason that budgeting is important?

• It helps you set goals

• It helps you not spend money you do not have

• It helps you prevent emergencies

• It reduces stress

• It can help you prepare for emergencies

What is Murphy's Law

• Good things happen to those that wait

• Bad things will happen if you are not prepared

• What goes around comes around

• There is no such thing as a free lunch

• Everything that can go wrong, will go wrong

In the Golden Rule of budgeting, what does the 50% stand for?

• Money that is allocated towards saving

• Money that is allocated towards necessities

• Money that is allocated towards wants/lifestyle

In the Golden Rule of budgeting, what does the 30% stand for?

• Money that is allocated towards saving

• Money that is allocated towards necessities

• Money that is allocated towards wants/lifestyle

In the Golden Rule of budgeting, what does the 20% stand for?

• Money that is allocated towards saving

• Money that is allocated towards necessities

• Money that is allocated towards wants/lifestyle

How can Murphy's law impact your budget?

• You can have more money to budget

• Something unexpected can happen in which you will need to change your budget

• Because Murphy's law is unpredictable it has no impact on your budget or how much you spend

What is "Parkinson's Law"?

• It is when you become economically stagnate

• When your expenses rise to meet income

• When you spend less money because you make less money

Which of these examples are of a Want

• Paying important Bills, basic food/water/shelter

• Lifestyle expenses, fast food, going on vacations

• Long and Short term goals, having a savings account, putting money away for a "rainy day"

Which of these examples are of a Need

• Paying important Bills, basic food/water/shelter

• Lifestyle expenses, fast food, going on vacations

• Long and Short term goals, having a savings account, putting money away for a "rainy day"