GFL Strand 2, Standard 2: Rational Decision-Making Process

What is the first step in making a financial decision?

• Spend money and adjust later.

• Think about your options and consequences.

• Borrow money before deciding.

• Ask someone else to make the choice for you.

What is a cost-benefit analysis?

• Comparing the good and bad results of a decision.

• Writing down your goals and tracking them.

• Deciding what to buy without thinking about it.

• Ignoring the long-term effects of your choices.

What is a rational decision?

• A choice made based on emotions.

• A well-thought-out choice considering pros and cons.

• A decision made quickly to save time.

• Any decision involving spending money.

What is an opportunity cost?

• The amount of money you spend on something.

• The benefits you give up when choosing one option over another.

• The total amount of your savings after a purchase.

• The best deal available in the market.

What is an example of a planned expense?

• Buying a coffee because you’re thirsty.

• Saving money for a vacation.

• Spending money impulsively on a sale.

• Paying more than expected for an item.

What is the difference between saving and investing?

• Saving is riskier than investing.

• Saving is for short-term goals, while investing is for long-term growth.

• Investing gives no returns, unlike saving.

• Saving always earns higher returns than investing.

What is delayed gratification?

• Spending money right away to feel satisfied.

• Waiting to make a purchase to meet long-term goals.

• Buying something expensive without planning for it.

• Avoiding making purchases altogether.

What is a trade-off in financial decisions?

• Choosing between two options and giving up one.

• Getting everything you want without sacrifice.

• Making decisions without comparing choices.

• Ignoring the effects of your choices on your finances.

What is instant satisfaction?

• Buying something immediately to feel happy.

• Waiting to spend money until it’s necessary.

• Choosing the least expensive option available.

• Investing money for a long-term goal.

What is one reason people save money instead of spending it?

• To prepare for future expenses and emergencies.

• To avoid paying bills altogether.

• To delay financial responsibility.

• To increase short-term satisfaction.