Chapter 1: Financial Literacy Basics

Front

Dish soap, dog food, clothes and Takis are all examples of ____________.

Back

goods

Front

Paying to have your hair cut, lawn mowed taxes filed, or house cleaned are all examples of ___________.

Back

services

Front

A cognitive bias is...

Back

An error in the way we think that can influence our decisions.

Front

How do people’s personal values and experiences affect how they make financial decisions?

Back

Personal values can cause you to spend and save money differently in order to achieve different goals.

Front

Many important factors and forces that influence your financial life now and in the future, which of the following are the four main financial influencers? Options: economic conditions, trade-offs, demographics, FOMO; economic conditions, demographics, culture, technology; trade-offs, opportunity cost, cost-benefit analysis, decision-making process; demographics, technology, debt, income

Back

economic conditions, demographics, culture, technology

Front

Which of the following is an example of the paradox of value? You might choose a diamond over a bottle of water if you really love dressing up, You might choose an inflatable raft over a luxury car if you are adrift at sea, You might choose a hamburger over a veggie burger at fast food restaurant, You might choose a pair of socks over a hat if you are feeling cold

Back

You might choose an inflatable raft over a luxury car if you are adrift at sea

Front

Which of the following statements best describes the concept of “diminishing marginal utility”?
An item’s exchange value increases over time
An item’s use value increases over time
The more of an item you acquire, the less useful or enjoyable it becomes
The less of an item you have, the less useful or enjoyable it becomes

Back

The more of an item you acquire, the less useful or enjoyable it becomes

Front

A website tells you, "Enjoy our services free for 3 months!" while shopping online. Which loss aversion strategy is this website using?

Back

Free trials and samples

Front

Which of the following is an example of a cognitive bias leading to increased spending?
Options:
Streaming videos filled with financial advice and implementing some of the strategies yourself
Seeing friends or celebrities with exciting new purchases in social media posts and buying those items, too
Learning about inflation and deciding you should be investing more money in your retirement account
Networking in person and on professional websites because you think it will increase your earnings

Back

Seeing friends or celebrities with exciting new purchases in social media posts and buying those items, too