5A Vocabulary

Front

The PACED Decision-Making Model is used to:

Back

Evaluate choices based on criteria and alternatives

Answer explanation

The PACED Decision-Making Model helps evaluate choices by considering various criteria and alternatives, making it a structured approach to decision-making, unlike the other options listed.

Front

Generational wealth refers to:

Back

Money, assets, and financial security passed down through family generations

Answer explanation

Generational wealth specifically refers to money, assets, and financial security that are passed down through family generations, distinguishing it from income or temporary financial aid.

Front

Assets are:

Back

Items that have financial value, like cash, property, and investments

Answer explanation

Assets are defined as items with financial value, such as cash, property, and investments. This distinguishes them from taxes, expenses, or loans, which do not represent ownership of valuable items.

Front

FAFSA is:

Back

A form used to apply for federal financial aid for college

Answer explanation

FAFSA stands for Free Application for Federal Student Aid. It is specifically designed for students to apply for federal financial aid for college, making the first answer choice correct.

Front

The difference between subsidized and unsubsidized student loans is:

Back

The government pays the interest on subsidized loans while the student is in school.

Answer explanation

The correct choice is that the government pays the interest on subsidized loans while the student is in school, making them more favorable compared to unsubsidized loans, which accrue interest immediately.

Front

A grant for college or technical school is:

Back

Free money provided based on financial need or academic merit

Answer explanation

A grant is not a loan; it does not need to be repaid. Instead, it is free money awarded based on financial need or academic merit, making it a valuable resource for students pursuing higher education.

Front

Scholarships, such as the HOPE Scholarship, are:

Back

Financial aid based on merit or need that does not need to be repaid

Answer explanation

Scholarships, like the HOPE Scholarship, provide financial aid based on merit or need and do not require repayment, making them distinct from loans or employer reimbursement programs.

Front

Income is:

Back

Money received from work, investments, or other sources

Answer explanation

Income refers to money received from work, investments, or other sources, making it the broadest definition of earnings. The other options describe deductions or savings, not income itself.

Front

Dividends are:

Back

Payments made to shareholders from a company’s profits

Answer explanation

Dividends are payments made to shareholders from a company’s profits, representing a share of the earnings. This distinguishes them from interest on savings or taxes on investments.

Front

Capital gains refer to:

Back

Profit earned from selling an investment at a higher price than it was bought

Answer explanation

Capital gains are defined as the profit earned from selling an investment at a higher price than it was purchased. This distinguishes it from other financial terms like investments, retirement accounts, or loans.