Sectors of Economy Study Guide

What is a budget?

• A budget is a type of investment strategy.
• A budget is a document for tracking employee performance.
• A budget is a financial plan for managing income and expenses.
• A budget is a list of all the products a company sells.

What is credit?

• Credit is the ability to borrow money or access goods and services with the promise to repay in the future.
• Credit is the process of saving money for future purchases.
• Credit refers to the amount of cash one has in their bank account.
• Credit is a type of loan that must be paid back immediately.

What is debt?

• Debt is a form of savings account.
• Debt is money that is borrowed and must be repaid.
• Debt is money that is given away as a gift.
• Debt is a type of investment.

A healthy market economy has a low rate of...

• inflation
• debt
• poverty
• unemployment

It is best if your income is more than your...

• savings
• investments
• loans
• expenses

What does personal finance mean?

• Managing money

• Paying bills

• Saving money

• All of the above

What should you do if you spend more money than you have in your budget?

• Borrow money from a friend

• Try to save more money next time

• Adjust your budget to spend less in other areas

• Nothing

What should you make sure to include when creating a personal budget?

• Only include income and savings goals.
• Focus solely on fixed expenses.
• Ignore debt repayments completely.
• Include income and all expenses.

What is the goal of the four sectors of a market

economy working together?

• To create market monopolies and decrease consumer choice.
• To limit competition and reduce innovation.
• To have goods and services that are produced and distributed

• To increase unemployment and inflation.

Which is NOT an example of opportunity cost?

• paying for a new roof instead of going on a cruise

• creating a budget for next year

• eating dinner out instead of buying groceries

• staying in a hotel instead of buying a new outfit