Unit 2 Review Game: Personal Finance

Review game rules: The first team to raise the correct answer in the air on their dry erase board earns the point. You can wager your points by taking a shot. If you miss, you lose the points that you wagered. If you make the shot, you gain the points that you wagered. First place= +6 Second place= +5 Third place= +4

Ready… Set… GO!!!

When a borrower must repay a loan based on compound interest rather than simple interest, they should expect pay the lender _________ total interest than they would under simple interest

More

The higher the income, the higher the tax rate= ___________ tax

Progressive

__________ tax is considered a regressive tax because it impacts low income earners more than high income earners.

sales

Using the _______ model will help you decide on a major decision to see if the marginal benefits outweigh the marginal costs.

PACED

When you buy a car and go to register it, you need to show proof of ___________.

insurance

When you evaluate risk and return, you are evaluating ___________ plans.

investment

If everyone in a country pays the same tax rate, then they are paying a proportional tax, also known as the _______ tax rate.

flat

Your credit _________ is based on your credit worthiness- how much banks trust you to repay a loan.

score

If you want to save money but don’t need access to the cash right away, a good investment option would be to put money in a ____.

CD, certificate of deposit

A lower deductible means the insurance company must pay more in an accident, so they make you pay for the risk with a higher ________.

premium

Typically the more education you have, your income ________.

increases

__________ insurance will give you a portion of your pay check if you are out of work due to injury or serious illness.

Disability

What order would you place the following investments from least risky to most risky? Bonds Stocks Savings Account Mutual Funds

C, A, D, B

When you __________ your investment assets, you are investing money in different things instead of putting all of your money into just one type of investment.

Diversify

Which type of financial institution is most likely to require a membership and offer lower rates and special perks to their membership? A. Savings and loan banks B. Large national banks C. Bank holding companies D. Credit union

D. Credit Union

To maximize profits, a bank would charge a __________ rate of interest on loans and pay a _________ rate of interest on deposits

Higher/lower

On which of the following loans would one be most likely to pay the highest interest rate? A home mortgage loan B. An automobile loan C. A credit card D. A student loan for college

C. Credit Card

Most insurance policies include a stipulated amount of money that they insured must pay when a claim is filed with the insurance company. What is the name for this insurance term? Shared liability B. Deductible C. Asset protection D. Premium

B. Deductible

If interest rates are ________, you will keep money in your savings or CD.

high

If you keep a savings account with a bank, you will get a ________ rate on a loan than what you would get on your savings account.

higher

When you are concerned about getting hurt at work or prematurely dying, then you should consider buying ________________ and _________________.

Disability and Life insurance

_____________ is when you receive goods in the present on agreement that one will pay for them in the future

Credit

Loans with people that have ____________ carry less risk because the borrower has assets that can be taken in place of payment

Collateral

Banks take in deposits, for which they pay a relatively ______ rate of interest; they then hold a small amount aside and loan out the rest at a _________ rate of interest.

Low; higher

___________________ is an important reason why people need financial investment plans

Retirement

_____________ is money paid by a borrower to a lender in exchange for the use of money

interest

Buying stock through ________ ________is less risky than buying individual company stock because you diversify your risk by buying small pieces of many companies at a time

Mutual funds

Dana has a fixed rate of 3. 5% on her 30-year mortgage Dana has a fixed rate of 3.5% on her 30-year mortgage. She ______ because she is repaying the loan with money that has less purchasing power than the money she borrowed

Gains, or benefits

If the interest rate on a 10-year treasury bonds is 2 If the interest rate on a 10-year treasury bonds is 2.3%, but the rate of inflation is 3.5%, then the bond investment is risky because the rate of inflation is ____________ than the return

higher

lower income people tend to spend a ________ proportion of their income on sales taxed items than higher income people.

higher

A _________ interest rate on a loan will not rise or fall during the term of the loan.

Fixed

Which investment carries the GREATEST risk but has the potential for the GREATEST return?

Stocks

Which of the factors contribute MOST to your credit score

Payment history

_________ interest applies only to the original amount borrowed called the __________. __________ interest applies to both the principal of the loan as well as accrued interest on the principal.

Simple; Principal; Compound

You would rather earn __________ interest on your savings.

Compound

Usually the highest APR you will pay is on a _____ _____ loan.

Credit Card

You would rather pay _________ interest on a loan.

Simple

Looping Questions 3 points per question

___________= additional, or one extra

marginal

___________= distribution

allocate

Redistribution of income= government taking _______ revenue and spreading it out to pay for public goods/services.

tax

Resolving market failures might include taxing companies that ___________, or breaking up monopolies

pollute

Minimal government regulations Property rights are strong Profit motive to start businesses This describes a _________ economy.

Market

People, businesses, and governments respond to incentives in ______________ ways. Examples of ___________ behavior: If taxes go down, spending will go up. If the corporate taxes go down, salaries for employees might go up.

predictable

An example of a positive __________ is when your boss tells you that if you work extra hours on the weekend, you will get a bonus.

incentive

A market, or mixed-market, economy has ________ _______- the freedom to buy and sell goods without government coercion.

Voluntary exchange

The cost of the next best alternative when one choice is made over the other is known as the _______ ________.

Opportunity Cost

The factors of production include capital, entrepreneurship, land, and _____________.

labor

A ____________ economy has far more government regulations and is more concerned with equitable allocation of resources.

Command

Government taking away rules= _____________

deregulation

When economists talk about scarcity, they are describing a condition in which human ________ exceed the resources to get what we desire.

wants

BONUS QUESTION +20 points for the game Draw a PPC graph Label inefficient production with an X Label desirable, but unattainable production with a Y