Family Finance Exam 1 Chapter 1

Front 1

Income not spent on current consumption

Back 1

Savings

Front 2

Content of living that they earnestly desire and seek to attain, maintain if attained, preserve if threatened and regain if lost.

Back 2

Standard of Living

Front 3

Raises nominal interest rates and lowers real interest rates

Back 3

Inflation

Front 4

Income exempt from current income taxes

Back 4

Tax-Sheltered

Front 5

Predicting, estimating or calculating in advance

Back 5

Forecasting

Front 6

A decline in business activity or downturn in the economy

Back 6

Recession

Front 7

A steady rise in the general level of prices resulting in a declining purchasing power of money

Back 7

Inflation

Front 8

The tax implications of an economic decision are affected by one's

Back 8

Marginal Tax Rate

Front 9

The price of money is represented by its

Back 9

Interest Rate

Front 10

The rate that banks charge each other for overnight deposits

Back 10

Federal Funds Rate

Front 11

Compensation for employment that is not in the form of wages, salaries, commissions, or other cash payment

Back 11

Employee Benefit

Front 12

A decline in business activity and a downturn in the economy

Back 12

Recession

Front 13

The cost of decision measured in terms of the most valuable alternative that is foregone or given up

Back 13

Opportunity Cost

Front 14

The ability of a good or service to satisfy a human want or need

Back 14

Utility

Front 15

Assets purchased with the goal of providing additional income from the asset itself.

Back 15

Investments

Front 16

The phase of the economic cycle where production is high, unemployment is low and retail sales are high

Back 16

Expansion

Front 17

A measure of the goods and services that one's income will buy

Back 17

Purchasing Power

Front 18

The value of all goods and services produced by workers and capital located in the United States

Back 18

Gross Domestic Product

Front 19

Government approved, employer-sponsored accounts which are paid with pre- tax dollars

Back 19

Flexible Spending Accounts

Front 20

The amount placed into a savings account or investment

Back 20

Principal

Front 21

Describes a declining economy

Back 21

Recession

Front 22

A wavelike pattern or rising and falling economic activity that occurs again and again over time.

Back 22

Economic Growth

Front 23

Falling prices in the marketplace

Back 23

Deflation

Front 24

A key to calculating the time value of money is the

Back 24

Assumed Rate of Return

Front 25

The extra satisfaction derived from having one more incremental unit of a product or service

Back 25

Marginal Utility

Front 26

The business cycle and the economic cycle are

Back 26

The same thing

Front 27

The best indicator of where the economy is headed over the next year or so

Back 27

Index of leading economic indicators

Front 28

Income adjusted for increases in the prices of goods and services

Back 28

Real Income

Front 29

When making economic decisions, the tax impacts are best evaluated by applying one's

Back 29

Marginal Tax Rate

Front 30

Income exempt from current taxation but for which taxes will likely be paid at a later date

Back 30

Tax-Sheltered

Front 31

To compare money to be received in different time periods or in different cash-flow patterns over time you must perform ____________________ value of money calculations.

Back 31

Time

Front 32

What is the best measure of changes in your cost of living over the next few years

Back 32

Your personal inflation rate

Front 33

A government-approved plan that allows payment of selected employee-paid expenses to be paid with pre-tax dollars is a

Back 33

Flexible Spending Arrangement