Mid-Term ReviewPersonal Financial LiteracyMrs. Chyko

1. List and define the 3 types of inflation.

Reflation - Occurs when prices are high, drop, and then rise to their previous level

Disinflation - Occurs when prices are rising, but at a slow rate

Hyperinflation - Rapidly rising, out-of-control price increases

2. Describe the characteristics of a growing economy

Lots of jobs People are spending money Financial security is easier

3. List and define the 3 causes of inflation

Cost Push-The cost to create the product rises and is NOT offset by productivity

Demand Pull-Consumers want to buy more goods and services than producers supply

Real Cost-Resources diminish or become harder to get

4. List and define the 3 types of pricing strategies

Market Based Value Based Cost-Plus

5. Explain the impact inflation has on our purchasing power

Inflation REDUCES our purchasing power

As prices rise our income does NOT Consumers cannot buy as much with

the same amount of money

6. Explain why the job market changes overtime

Peoples needs and wants change Need for different types of workers

evolve Technology changes

7. Explain the difference between hard skills and soft skills

Hard skills are technical skills Working machinery, nursing procedures

Soft skills are people skills Communication, team work, leadership

8. Define tuition. The charge for instruction at a

school Community college, State college, Trade

school Government loans, grants,

scholarships, job

9. Difference between required deductions & optional deductions.

Required - Income tax, Social Security tax, and Medicare tax

Optional – Insurances, Savings plan, Retirement plan (401K)

10. Difference between disposable income and discretionary income

Disposable – Income after Taxes are paid

Discretionary – Income after needs are met

11. Define 1040EZ Form Form used to process taxes NO DEPENDENTS Can be used by single and joint filers

12. List the five components of a SMART Goal

Specific Measurable Attainable Realistic Time-bound To help us think our goals through

13. Define advertising

Method of informing or persuading consumers

Promoting and selling products

14. Examples of advertisements: Media – TV, radio Internet – Pop up windows Print – Newspaper, flyers Direct – Sample of product

15. The 6 steps of the Decision Making Process Define problem or need List options Compare options Make decision Take action Revaluate

16. The importance of Time Management.

List 5 characteristics of Time Management

1. PRIORITIZE2. BREAK DOWN LARGE PROJECTS INTO SMALLER ONES3. MAKE A TO-DO-LIST4. USE A DAILY PLANNER5. WORK WHEN YOU ARE MOST RODUCTIVE

17. Explain the difference between ECONOMIZING and OPTIMIZING

Economizing – save as much possible; spend only when necessary

Optimizing – spreading money as far as it will go. Get the most value for the money spent

18. An individual that can qualify as an EXEMPTION

YOU Pay for more than 50% of a persons living expenses.

The individual cannot be claimed by anyone else.

19. Difference between a personal goal, financial goal, & financial plan

Personal goal – things you want to achieve

Financial goal – how you will pay for your personal goal

Financial Plan – Contains personal goals and a timeline for reaching these goals and methods you will use to finance them.

20. Explain the benefit of utilizing a Pay-Yourself- First Budget

Requires you to save money first!! Income = Savings + Expenses

21. Explain how to calculate the dollar variances on your budget

Determine the difference between actual and planned dollar amounts.

22. Explain favorable variance and unfavorable variance

Favorable Variance – Earn or save more than planned and spend less

Unfavorable Variance – Earn or save less than planned and spend more

23. 3 Items you would gather & analyze for financial planning

Personal budget, checkbook, and current pay stub

24. Explain the difference between identity theft and phishing

ID Theft - Act of using someone’s personal information without permission to commit fraud or crime

Phishing – Scam used to get individuals to give out personal information

25. Demonstrate payroll process by calculating:

- Regular pay - Overtime rate per hour - Overtime pay - Gross pay - Required deductions - Optional deductions - Net Pay