Personal Finance Section 1 Study Questions

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Personal Finance Section 1 Study Questions
Section 1 Study Questions (9.0 points)
Answer each question fully. Complete sentences are not necessary.
Lesson 1 (3.0 points)
1. Name at least two things financial planning could help you do. (0.5 points)
-Create a budget
-Plan for retirement
2. What is trade? (0.5 points)
-Trade is the exchange of things of value
3. What is a service? (0.5 points)
-Service is something of value that a person
4. Name one of the three functions of money. (0.5 points)
Medium of exchange: Money can be used for buying and selling goods and services. If there were no money, goods would have to be exchanged through the process of barter
5. The real estate market is categorized in which way? (0.5 points)
There are several main categories of real estate. Here are several major types:
1. Vacant Land (unimproved)
2. Residential
3. Commercial
4. Industrial
5. Agricultural
Within every major type of properties are several sub-categories
6. What is a country’s GDP? (0.5 points)
The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy
Lesson 2 (3.0 points)

1. What is a market economy? (0.5 points)
-An economy that relies chiefly on market forces to allocate goods and resources and to determine prices
2. Name at least two features of capitalism. (1.0 points)
-1. Laissez-faire - as little gov't interference in the economy as possible
-2. Private ownership of companies and businesses - this would provide for competition among businessmen and bring prices down for consumers
3. A business that sells watches that are more inexpensive than the watches a competitor sells is using which type of competition? (0.5 points)
-A Business Model is being used when a company sells merchandise more expensive than competitors
4. What is a monopoly? (0.5 points)
-The exclusive possession or control of the supply or trade in a commodity or service.
5. What is a motive? (0.5 points)
-A reason for doing something

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