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Mid-Term Review

Personal Financial Literacy Mrs. Chyko. Mid-Term Review. 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

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Mid-Term Review

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  1. Personal Financial Literacy Mrs. Chyko Mid-Term Review

  2. 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

  3. 2. Describe the characteristics of a growing economy • Lots of jobs • People are spending money • Financial security is easier

  4. 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

  5. 4. List and define the 3 types of pricing strategies • Market Based • Value Based • Cost-Plus

  6. 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

  7. 6. Explain why the job market changes overtime • Peoples needs and wants change • Need for different types of workers evolve • Technology changes

  8. 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

  9. 8. Define tuition. • The charge for instruction at a school • Community college, State college, Trade school • Government loans, grants, scholarships, job

  10. 9. Difference between required deductions & optional deductions. • Required - Income tax, Social Security tax, and Medicare tax • Optional – Insurances, Savings plan, Retirement plan (401K)

  11. 10. Difference between disposable income and discretionary income • Disposable – Income after Taxes are paid • Discretionary – Income after needs are met

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

  13. 12. List the five components of a SMART Goal • Specific • Measurable • Attainable • Realistic • Time-bound • To help us think our goals through

  14. 13. Define advertising • Method of informing or persuading consumers • Promoting and selling products

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

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

  17. 16. The importance of Time Management. • List 5 characteristics of Time Management 1. PRIORITIZE 2. BREAK DOWN LARGE PROJECTS INTO SMALLER ONES 3. MAKE A TO-DO-LIST 4. USE A DAILY PLANNER 5. WORK WHEN YOU ARE MOST RODUCTIVE

  18. 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

  19. 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.

  20. 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.

  21. 20. Explain the benefit of utilizing a Pay-Yourself- First Budget • Requires you to save money first!! • Income = Savings + Expenses

  22. 21. Explain how to calculate the dollar variances on your budget • Determine the difference between actual and planned dollar amounts.

  23. 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

  24. 23. 3 Items you would gather & analyze for financial planning • Personal budget, checkbook, and current pay stub

  25. 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

  26. 25. Demonstrate payroll processby calculating: • - Regular pay • - Overtime rate per hour • - Overtime pay • - Gross pay • - Required deductions • - Optional deductions • - Net Pay

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