Week 2 - Global Economics
What is inflation vs deflation
Inflation is the rise of prices
Deflation is the lowering of prices
Is it ever too late to start saving?
No
What is investing?
The process of setting money aside to increase wealth over time for long-term financial goals.
Which of the following is a fixed expense?
Rent or mortgage
Groceries
Utility Bill
Entertainment
Rent or mortgage
What does a budget help you to do?
Manage income and spending effectively
What is disinflation?
What is the difference between a checking account and a savings account?
A checking account is a type of spending account and you don't earn interest
A savings account is a type of account where your money starts to incur interest over time.
What is the meaning of volatility?
Volatility is liable to change rapidly and unpredictably, especially for the worse.
What is the 50/30/20 Rule
Spend 50% on needs, 30% on wants, Save 20%
Which of the following is an example of a variable expense?
Rent
Dining out
Electric Bill
Entertainment subscriptions
Dining out
What is the difference between imports and exports
Imports are resources, materials or goods a country buys from another country
Exports are resources, materials or goods a country produces and sells to another country.
If I make more money should I spend more money?
No, you should only spend more if it's necessary, don't break the bank trying to flex!!
What is the Risk-Return Tradeoff
The risk-return tradeoff states that the potential return on an investment rises with an increase in risk.
True or False - Net income is the money you take home after taxes and deductions
True
What can happen if you don't stick to your budget?
You may overspend and accumulate debt
What is the law of Supply and Demand
An economic theory that describes the interaction between sellers and buyers for good and services
What is a 401(k)
A qualified retirement plan offered by a company to its employees who contribute money from their gross pay.
Employee benefits may include company contributing a certain amount to 401 (k)
What is the difference between a Bull vs Bear Market?
Bull market signifies that the market is on a rise
Bear market refers to when the market is on a decline
True or false? - A budget should always include a savings plan
True
Why include insurance in your budget?
It helps protect you from financial loss during emergencies
What are the 4 Economic Systems?
Traditional Economy
Command Economy
(Free) Market Economy
Mixed Economy
A retirement savings plan that allows people who are self-employed or own a small business to make contributions to their retirement (and their employees)
What is a bond?
Bonds are sold by companies and governments. When you buy a bond, you are basically lending your money to the issuer for a set period of time.
A portion of your ___ should be set aside for future goals and emergencies?
Savings
Income
Entertainment
Wants
Savings
What is the purpose of a zero-based budget
A) To ensure every dollar of income is assigned to an expense or goal
B) To leave extra money unplanned for future use
C) To avoid tracking spending details
D) To spend all money before saving
To ensure every dollar of income is assigned to an expense or goal