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44 Cards in this Set
- Front
- Back
domestic labor
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refers to labor (typically unpaid that is under taken to maintain the well being of families)
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Microeconomics approach Hypothesis 1
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household work will be allocated to the spouses' relative efficiency. The relative wages of husbands and wives will be important predictors of their household time
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Microeconomics approach Hypothesis 2
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Demand for leisure will be positively related to family income. The higher the income, the less time spent in household
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Family Sociology Approach: Resource Theory
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Partner with the most relative resources will have the most power to arrange domestic affairs the way they want. Hypothesis: when husband wife level of education are equal or near equal, division of labor will be more equal than for couples with unequal levels
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Family Sociology Approach:
Socialization Theory |
Idea that "you are what you were brought up to be." Attitudes toward sex roles hypothesis: spouses with more egalitarian ideas will have more egalitarian division of labor.
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Family Economists Approach
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Similar to economists but focus is on time allocation in household production, not a relationship between market and leisure.
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Family Economists Approach:
Hypothesis 1 |
the more children a family has, the more household production will be done
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Family Economists Approach: Hypothesis 2
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The younger the youngest child is, the more household production will be done
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Family Economists Approach:
Constraint Hypothesis (Time Availability) |
Employed wives spend less time in household work. Same is true for husbands
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Family Economists Approach:
Efficiency Hypothesis |
More educated women will spend less time in household production than less educated women because educated women should be more efficient at household production
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Long Term goals
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6+ years
future value estimates time horizon |
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Intermediate goals
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2-5 years
time horizon prioritized |
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Short term goals
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1 year
time horizon prioritized |
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Balance Sheet
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describes your financial position at a given point in time.
assets liabilities or debts net worth |
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Liquid assets
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assets held in the form of cash or "near cash"
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Net Worth
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difference between assets and liabilities
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Real Property
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immovable property, long lives, high costs
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Personal Property
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movable, mostly depreciate in value
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Fair Market Value
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price at which we can reasonably expect to sell assets
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Liabilities
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Current (short term)-owed and due within a year
long term-debt due 1 year or more from the date of the balance sheet |
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Outstanding balances
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short term- bills outstanding, revolving credit
long term- installment debt, mortgage, other debt |
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Net Worth
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Measure of your financial worth
equity in owned assets what remains after selling |
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Income/Expenditure Statement
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income (cash in)- earned income, non-earned income
expenditures (cash out)- 4 types: fixed, certain; fixed uncertain; flexible, certain; flexible, uncertain |
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Solvency Ratio
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Shows how much of a decline in the market value of their assets a family can have before becoming insolvent. SR=networth/total assets
The higher the better desirable >.5 |
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Liquidity Ratio
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Shows how much of their 1 year liabilities they could pay with liquid assets.
LR=liquid assets/total current debt The higher the better desirable >.5 |
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Savings Ratio
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Shows family's level of preparation for the future.
SR=cash surplus+amountsaved/annual net income The higher the better desirable >.05 |
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Debts Service Ratio
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Shows burden that family's debt is relative to their income.
DSR=monthly loan payments/monthly gross income Lower the better desirable<.35 |
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Chapter 7 bankruptcy
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Straight Bankrupt; person's assets given to trustee to be sold-distributed to creditors
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Chapter 13 bankruptcy
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Wage Earner Plan; develop plan to pay off (over 3-5 years)
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Consumer debt
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charge accounts-nonrevolving (fixed term), revolving.
Installment loans (fixed term) Single payment loans (30 day, 90 day note) Credit Cards-nonrevolving or revolving |
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Mortgage debt
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first mortgage
second mortgage-equity installment loan equity credit line |
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Objective Benefits of Credit
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During high inflation times, it may be cheaper to buy now
Sometimes tax advantages of buying on credit Sometimes price discounts when using credit When traveling abroad, better exchange rate |
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Subjective Benefits of Credit
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obtaining expensive goods now while spreading out payments.
Convenience of purchasing and record keeping Safety and security of not carrying large amounts of cash |
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Objective Costs of Credit
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low inflation, it will be more expensive
Sometimes price increases with credit purchase increasingly common application fees, membership costs. |
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Subjective Costs of Credit
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Risks of overspending and impulse buying
psychological distaste for owing money with variable rate credit, greater risk of paying more |
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Your credit card company must send you a notice before they can
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increase your interest rate
change certain fees that apply to your account. make other significant changes to the terms of your card. |
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Your credit card company must send you a notice before they can
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increase your interest rate.
change certain fees that apply to your account. Make other significant changes to the terms of your card. |
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The company does not have to send you a 45-day advance notice if
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you have variable interest rate tied to an index, if the index goes up, the company does not have to provide notice before your rate goes up.
your introductory rate expires and reverts to the previously disclosed "go to" rate. Your rate increases because you are in a workout agreement and you haven't made your payments as agreed. |
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Your monthly credit card bill will include
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How long it will take you to pay off your balance if you only make...
How much you would need to pay in order to pay off your balance. |
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No interest rate increases for the first year. Exceptions:
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If your card has a variable interest rate tied to an index, your rate can go up whenever the index goes up.
If there is an intro rate, it must be in place for at least 6 months; after that your rate can revert to the "go to" rate the co. disclosed when you got the card. If you are more than 60 days late in paying your bill. If you are in a workout agreement and you don't make your payments. |
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Restrictions on over-the-limit transactions
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You must tell your cc co that you want it to allow transactions that will take you over your credit limit.
Otherwise, if a transaction would take you over your limit, it may be turned down. If you don't opt-in to over-the-limit transactions and your cc co allows one to go through, it cannot charge you an over-the-limit fee. |
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Caps on high-fee cards
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If your cc co requires you to pay fees cannot total..
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Protections for underage consumers
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If you are...you will ned to show that you are able to make payments, or you will need a cosigner, in order to open a cc account.
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No 2 cycle credit card billing
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cc co can only impose interest charges on balances in the current billing cycle.
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