Personal Decision Making Vocabulary Terms

What is Personal Finance?

• The management of an individual's money, including budgeting, saving, and investing.

• A process of paying bills only.

• A way to generate wealth only through trading stocks.

• A method for businesses to manage profits.

What is Income?

• Money received for work or through investments

• Money spent on goods and services

• The profit earned by a company

• An expense incurred in production

Wants are desires for things that are not essential for survival.

• Desires for things that are not essential for survival.

• Basic necessities required for survival.

• Simple biological needs.

• Irrelevant wishes.

Needs are essential for survival.

• Essential requirements for survival

• Optional luxuries

• Non-essential desires

• Secondary wishes

Values guide behavior and decision-making.

• They are numerical figures used in math.

• They are monetary amounts assigned to items.

• They are beliefs or principles that guide behavior.

• They are laws imposed by the government.

Goals are targets or desired outcomes.

• Targets or desired outcomes

• Obstacles

• Irrelevant tasks

• Random choices

Trade refers to the exchange of goods and services.

• Exchange of goods and services

• Creation of money

• Complex financial operations

• None of the above

Expenses are the costs incurred in a business operation.

• Expenses are the costs incurred in a business operation.

• Expenses refer to the income generated.

• Expenses are the profits earned.

• Expenses signify the losses incurred.

A Budget is a plan that outlines expected income and expenses.

• A plan that outlines expected income and expenses.

• A detailed record of past spending.

• A government regulation.

• An estimate of future rainfall.

Interest is the cost of borrowing money.

• It is the cost of borrowing money.

• It is a measure of central tendency.

• It is a type of financial asset.

• It is a financial market indicator.