Week 5 - Economics Review

What is a Budget?

• Money used to buy and pay for household items, such as electricity and groceries

• Money to give to others

• Money used to eat at an all you can eat buffet

• Money used to build a grocery store

What is credit?

• when you purchase items with cash

• when you use a check to buy groceries

• when you deposit money in your checking account

• when you buy something and pay for it later

What is debt?

• items you buy with cash

• Money you borrowed and has not repaid

• money you have available in your account

• money used to buy clothes

What is a credit card?

• A card issued by a bank to purchase goods from a line of credit they approve and you pay back each month

• A card used where the money comes directly from your personal account

What is the knowledge and skill-set necessary to be an informed consumer and to manage your finances effectively?

• Economics

• The Five Foundations of Financial Success

• Financial Literacy

• Business Knowledge

What keeps most Americans from building wealth?

• Unemployment

• Problems at Home

• Debt

• Lack of Financial Knowledge

Which of the following prey on people in desperate financial situations, and charge extremely high interest rates?

• Banks

• Credit Card Companies

• Mortgage Lenders

• Predatory Lenders

What is the purpose of a credit score?

• To apply for a credit card

• To help you save money

• A reliable assessment of your credit-worthiness and risk

• To determine how quickly you can get out of debt

What is interest that is paid on interest previously earned?

• Compound Interest

• Inflation

• Taxes

• Overdraft Fees

Which is NOT a financial norm for typical American families?

• Most American families are broke

• Most American families are financially secure

• Debt keeps American families from building wealth

• American families are drowning in debt and buying things they can't afford